PROTECTIONISM 
 
 THE -ISM WHICH TEACHES THAT WASTE 
 MAKES WEALTH 
 
 WILLIAM GRAHAM SUMNER 
 
 i 
 
 Professor of Political and Social Science in Yale College 
 
 NEW YORK 
 HENRY HOLT AND COMPANY 
 
 1 8 83 
 
COPYRIGHT, 1885, 
 
 BY 
 HENRY HOLT & CO 
 
 W. L. MERSHON & Co., 
 
 Printers and Electrotypers. 
 
 RAH WAY, N. J. 
 
// is with pleasure that I place here the name of a 
 
 gentleman to whom the cause of free-trade 
 
 in the United States is under 
 
 heavy obligations 
 MR. THOMAS HOLLAND, 
 
PREFACE. 
 
 During the last fifteen years we have had two 
 great questions to discuss: the restoration of the 
 currency, and civil-service reform. Neither of 
 these questions has yet reached a satisfactory so- 
 lution, but both are in the way toward such a 
 result. The next great effort to strip off the 
 evils entailed on us by the civil war will consist 
 in the repeal of those taxes which one man was 
 enabled to levy on another, under cover of the 
 taxes which the government had to lay to carry 
 on the war. I have taken my share in the dis- 
 cussion of the first two questions, and I expect 
 to take my share in the discussion of the third. 
 
 I have written this book as a contribution to a 
 popular agitation. I have not troubled myself 
 to keep or to throw off scientific or professional 
 dignity. I have tried to make my point as di- 
 rectly and effectively as I could for the readers 
 whom I address, viz., the intelligent voters of all 
 
vi PREFACE. 
 
 degrees of general culture, who need to have it 
 explained to them what protectionism is and how 
 it works. I have therefore pushed the contro- 
 versy just as hard as I could, and have used plain 
 language, just as I have always done before in 
 what I have written on this subject. I must 
 therefore forego the hope that I have given any 
 more pleasure now than formerly to the advocates 
 of protectionism. 
 
 Protectionism seems to me to deserve only con- 
 tempt and scorn, satire and ridicule. It is such 
 an arrant piece of economic quackery, and it 
 masquerades under such an affectation of learning 
 and philosophy, that it ought to be treated as 
 other quackeries are treated. Still, out of defer- 
 ence to its strength in the traditions and lack of 
 information of many people, I have here under- 
 taken a patient and serious exposition of it. 
 Satire and derision remain reserved for the dog- 
 matic protectionists and the sentimental protec- 
 tionists; the Philistine protectionists and those who 
 hold the key of all knowledge ; the protection- 
 ists of stupid good faith, and those who know their 
 dogma is a humbug and are therefore irritated at 
 the exposure of it ; the protectionists by birth 
 
PREFACE. vii 
 
 and those by adoption ; the protectionists for 
 hire and those by election ; the protectionists by 
 party platform and those by pet newspaper ; the 
 protectionists by " invincible ignorance," and 
 those by vows and ordination ; the protectionists 
 who run colleges, and those who want to burn 
 colleges down ; the protectionists by investment 
 and those who sin against light ; the hopeless 
 ones who really believe in British gold and dread 
 the Cobden Club, and the dishonest ones who 
 storm about those things without believing in 
 them ; those who may not be answered when 
 they come into debate, because they are "great " 
 men, or because they are "old " men, or because 
 they have stock in certain newspapers, or are 
 trustees of certain colleges. All these have hon- 
 ored me personally, in this controversy, with more 
 or less of their particular attention. I confess 
 that it has cost me something to leave their cases 
 out of account, but to deal with them would have 
 been a work of entertainment, not of utility. 
 
 Protectionism arouses my moral indignation. 
 It is a subtle, cruel, and unjust invasion of one 
 man's rights by another. It is done by force of 
 law. It is at the same time a social abuse, an 
 
viii PREFACE. 
 
 economic blunder, and a political evil. The moral 
 indignation which it causes is the motive which 
 draws me away from the scientific pursuits which 
 form my real occupation, and forces me to take part 
 in a popular agitation. The doctrine of a " call " 
 applies in such a case, and every man is bound to 
 take just so great a share as falls in his way. 
 That is why I have given more time than I could 
 afford to popular lectures on this subject, and it 
 is why I have now put the substance of those 
 lectures into this book. 
 
 W. G. S. 
 
CONTENTS. 
 
 PAGE 
 
 CHAPTER I. DEFINITIONS. STATEMENT OF THE QUES- 
 TION TO BE INVESTIGATED i 
 
 (a.) The system of which protectionism is a survival . I 
 
 (^.) Old and new conceptions of the state ... 4 
 
 (c.) Definition of protectionism and of theory ... 9 
 
 (d.) Definition of free trade and of a protective duty . 16 
 
 (e.) Protectionism raises a purely domestic controversy . 17 
 
 (/.) "A tariff is not a tax" 18 
 
 CHAPTER II. PROTECTIONISM EXAMINED ON ITS OWN 
 
 GROUNDS 24 
 
 (a.) Assumptions of protectionism . . . 25 
 (&.) Necessary conditions of successful protective legis- 
 lation 27 
 
 (c.) Examination of the means proposed, i. e., taxes . 34 
 
 (d.) The plan of mutual taxation 37 
 
 (e.) The proposal to create an industry >^ . . .41 
 ^(y.) The proposal to develop natural resources .49 
 
 (.) The proposal to raise wages [^. . . . .54 
 ' (//.) The prevention of competition by foreign pauper 
 
 labor 59 
 
 (i.) The proposal to raise the standard of comfort . . 60 
 
 CHAPTER III. PROTECTIONISM EXAMINED ADVERSELY. 
 
 I. Protectionism is hostile to trade . . . . 67 
 
 (a.) Rules for safe trade . . . . . . .67 
 
 (3.) Economic units not national units .... 70 
 
x CONTENTS. 
 
 PAGfe 
 
 2. Protectionism at war with improvement . . 75 
 (a.) Taxes to offset cheapened transportation ... 76 
 (/>.) Sugar bounties ........ 80 
 
 (c.) Forced foreign relations to regulate improvements 
 
 which can no longer be defeated . . . .91 
 
 3. Protection lowers wages . . . . .97 
 (a.) No true wages-class in the United States ... 98 
 (b.) How taxes do act on wages . . . . .104 
 (c.) Perils of statistics, especially of wages . . .107 
 
 4. Protectionism is socialism . . . . .ill 
 
 CHAPTER IV. SUNDRY FALLACIES OF PROTECTIONISM . 114 
 
 (a.) Infant industries 114. 
 
 (b.) Protection lowers prices . . . . . .117 
 
 (c.) Danger of becoming purely agricultural . . .119 
 (d.) Connection of manufactures and prosperity . . 121 
 (e.) Diversification of industry . . . . .122 
 
 (f.) Manufactures give value to land . . . '123 
 
 (g.) The truck-farm argument 125 
 
 (h.) Farmers are saved from competition . . . .127 
 (i.) Without protection no industries . . . .130 
 (/.) Protection offers variety of employment . * .134 
 
 (k.) Independence ..'', 134 
 
 (/.) Salvation from foreign monopoly . . . .136 
 (m.) Free trade good in theory but not in practice . . 137 
 (w.) Trade is war 139 
 
 (0.) Employment for idle labor and* capital . . . 140 
 (/.) Young nations need protection . . . . .141 
 
 (g.) The war argument . . . . . . .142 
 
 (r.) Great moral development of the nation by protection 143 
 
 "'(j.) Losing as consumers and winning as producers . . 147 
 
 (f.) That the foreign producer pays for protection . . 149 
 
 CHAPTER V. SUMMARY AND CONCLUSION . . .156 
 
PROTECTIONISM. 
 
 CHAPTER I. 
 
 DEFINITIONS: STATEMENT OF THE QUESTION 
 TO BE INVESTIGATED, 
 
 A) The System of which Protection is a Survival. 
 
 i. The statesmen of the eighteenth century sup- 
 posed that their business was the art of national 
 prosperity. Their procedure was to form ideals of 
 political greatness and civil prosperity on the one 
 hand, and to evolve out of their own consciousness 
 grand dogmas of human happiness and social 
 welfare on the other hand. Then they tried to 
 devise specific means for connecting these two 
 notions with each other. Their ideals of political 
 greatness contained, as predominant elements, a 
 brilliant court, a refined and elegant aristocracy, 
 well developed fine arts and belles lettres, a power, 
 ful army and navy, and a peaceful, obedient and 
 
hard working peasantry and artisan class to pay 
 the taxes and* support' the other part of the polit- 
 ical structure. In this ideal the lower ranks paid 
 upward, and the upper ranks blessed downward, 
 and all were happy together. The great political 
 and social dogmas of the period were exotic and in- 
 congruous. They were borrowed or accepted from 
 the classical authorities. Of course the dogmas 
 were chiefly held and taught by the philosophers, 
 but, as the century ran its course, they penetrated 
 the statesman class. The statesman who had had 
 no purpose save to serve the " grandeur " of the 
 king, or to perpetuate a dynasty, gave way to 
 statesmen who had strong national feeling and 
 national ideals, and who eagerly sought means to 
 realize their ideals. Having as yet no definite 
 notion, based on facts of observation and experi- 
 ence, of what a human society or a nation is, and 
 no adequate knowledge of the nature and opera- 
 tion of social forces, they were driven to empirical 
 processes which they could not test, or measure, 
 or verify. They piled device upon device and fail- 
 ure upon failure. When one device failed of its 
 intended purpose and produced an unforeseen evil, 
 they invented a new device to prevent the new 
 
THE ART OF PROSPERITY. 3 
 
 evil. The new device again failed to prevent, and 
 became a cause of a new harm, and so on indefi- 
 nitely. 
 
 2. Among their devices for industrial pros- 
 perity were (i) export taxes on raw materials, to 
 make raw materials abundant and cheap at home ; 
 (2) bounties on the export of finished products, 
 to make the exports large ; (3) taxes on imported 
 commodities to make the imports small, and thus, 
 with No. 2, to make the " balance of trade " fa- 
 vorable, and to secure an importation of specie ; (4) 
 taxes or prohibition on the export of machinery, 
 so as not to let foreigners have the advantage of 
 domestic inventions ; (5) prohibition on the emi- 
 gration of skilled laborers, lest they should carry 
 to foreign rivals knowledge of domestic arts ; (6) 
 monopolies to encourage enterprise ; (7) naviga- 
 tion laws to foster ship-building or the carrying 
 trade, and to provide sailors for the navy ; (8) a 
 colonial system to bring about by political force 
 the very trade which the other devices had 
 destroyed by economic interference ; (9) laws for 
 fixing wages and prices to repress the struggle of 
 the non-capitalist class to save themselves in the 
 social press ; (10) poor-laws to lessen the struggle 
 
4 PROTECTIONISM. 
 
 by another outlet ; (n) extravagant criminal laws 
 to try to suppress another development of,, this 
 struggle by terror ; and so on, and so on. 
 
 J5.) Old and Neiv Conceptions of the State. 
 
 3. Here we have a complete illustration of one 
 mode of looking at human society, or at a state. 
 Such society is, on this view, an artificial or 
 mechanical product. It is an object to be 
 molded, made, produced by contrivance. Like 
 every product which is brought out by working 
 up to an ideal instead of working out from antece- 
 dent truth and fact, the product here is hap haz- 
 ard, grotesque, false. Like every other product 
 which is brought out by working on lines fixed 
 by h priori assumptions, it is a satire on human 
 foresight and on what we call common sense. 
 Such a state is like a house of cards, built up 
 anxiously one upon another, ready to fall at a 
 breath, to be credited at most with naive hope 
 and silly confidence ; or, it is like the long and 
 tedious contrivance of a mischievous school-boy, 
 for an end which has been entirely mis-appreci- 
 ated and was thought desirable when it should 
 have been thought a folly ; or, it is like the mu- 
 
WHA T A STA TE IS. 5 
 
 seum of an alchemist, filled with specimens of his 
 failures, monuments of mistaken industry and 
 testimony of an erroneous method ; or, it is like 
 the clumsy product of an untrained inventor, who, 
 instead of asking " what means have I, and to 
 what will they serve ? " asks : " what do I wish 
 that I could accomplish ? " and seeks to win steps 
 by putting in more levers and cogs, increasing 
 friction and putting the solution ever further off. 
 4. Of course such a notion of a state is at war 
 with the conception of a state as a seat of origi- 
 nal forces which must be reckoned with all the 
 time ; as an organism whose life will go on any 
 how, perverted, distorted, diseased, vitiated as it 
 may be by obstructions or coercions ; as a seat of 
 life in which nothing is ever lost, but every ante- 
 cedent combines with every other and has its 
 share in the immediate resultant, arid agajn in the 
 next resultant, and so on indefinitely; as the 
 domain of activities so great that they should 
 appall any one who dares to interfere with them ; 
 of instincts so delicate and self-preservative that 
 it should be only infinite delight to the wisest man 
 to see them come into play, and his sufficient 
 glory to give them a little intelligent assistance. 
 
PROTECTIONISM. 
 
 a state well performed its functions of provid- 
 ing peace, order and security, as conditions under 
 
 " which the people could live and work, it would be 
 
 'the proudest proof of its triumphant success that 
 it had nothing to do that all went so smoothly 
 that it had only to look on and was never called to 
 interfere ; just as it is the test of a good business 
 man that his business runs on smoothly and 
 prosperously while he is not harassed or hurried. 
 
 ^The people who think that it is proof of enter- 
 prise to meddle and "fuss "may believe that a 
 good state will constantly interfere and regulate, 
 and they may regard the other type of state as 
 
 *'" non-government." The state can do a great deal 
 more than to discharge police functions. If it will 
 follow custom, and the growth of social structure 
 'to provide for new social needs, it can powerfully 
 
 * aid the production of structure by laying down 
 lines of common action, where nothing is needed 
 but some common action on conventional lines ; or, 
 
 y 
 
 it can systematize a number of arrangements 
 which are not at their maximum utility for want 
 of concord; or, it can give sanction to new rights 
 which are constantly created by new relations 
 *under new social organizations, and so on. 
 
STA TESMEN. J 
 
 5. The latter idea of the state has only begun 
 to win way. All history and sociology bear wit- 
 ness to its comparative truth, at least when com- 
 pared with the former. Under the new concep- 
 tion of the state, of course liberty means break- 
 ing off the fetters and trammels which the 
 " wisdom " of the past has forged, and laisscz 
 faire, or " let alone," becomes a cardinal maxim 
 of statesmanship, because it means, "Cease the 
 empirical process. Institute the scientific process. 
 Let the state come back to normal health and 
 activity, so that you can study it, learn something 
 about it from an observation of its phenomena, 
 and then regulate your action in regard to it by 
 intelligent knowledge." Statesmen suited to this 
 latter type of state have not yet come forward in 
 any great number. The new radical statesmen 
 show no disposition to let their neighbors alone. 
 They think that they have come into power just 
 because they know what their neighbors need to 
 have done to them. Statesmen of the old type, 
 who told people that they knew how to make 
 every body happy, and that they were going to do 
 it, were always far better paid than any of the 
 new type ever will be, and their failures never 
 
8 PROTECTIONISM. 
 
 costthem public confidence either. We have got 
 tired of kings, priests, nobles and soldiers, not 
 because they failed to make us all happy, but 
 because our b priori dogmas have changed 
 fashion. We have put the administration of 
 the state in the hands of lawyers, editors, 
 litterateurs and professional politicians, and 
 they are by no means disposed to abdicate the 
 functions of their predecessors, or to aban- 
 don the practice of the art of national pros- 
 perity. The chief difference is that, whereas 
 the old statesmen used to temper the practice 
 of their art with care for the interests of the 
 kings and aristocracies which put them in power, 
 the new statesmen feel bound to serve those 
 sections of the population which have put them 
 where they are. 
 
 6. Some of the old devices above enumerated 
 <( 2) are, however, out of date, or are becoming 
 -obsolete.* Number 3, taxes on imports for other 
 than fiscal purposes, is not among this number. 
 Just now such taxes seem to be coming back into 
 
 * February 4, 1884, Mr. Robinson of New York proposed, in 
 the House of Representatives, an amendment to the Constitution, 
 so as to allow Congress to lay an export duty on cotton for the 
 encouragement of .home manufactures. (Record, 862). 
 
THE -ISM DEFINED. 9 
 
 fashion, of to be enjoying a certain revival. It is 
 a sign of the deficiency of our sociology as com- 
 pared with our other sciences that such a phe- 
 nomenon could be presented in the last quarter of 
 the nineteenth century, as a certain revival of 
 faith in the efficiency of taxes on imports as a 
 device for producing national prosperity. There 
 is not a single one of the eleven devices men- 
 tioned above, including taxes on the exportation 
 of machinery and prohibitions on emigration,. / 
 which is not quite as rational and sound as taxes; 
 on imports. 
 
 I now propose to analyze and criticise pro- 
 tectionism. 
 
 C.) Definition of Protectionism. Definition of 
 " Theory." 
 
 7. By protection/^;;* J^mean the doctrine of 
 protective taxes as a device to be employed in 
 the art of national prosperity. The protectionists 
 are fond of representing themselves as " practical" 
 and the free traders as " theorists." Theory is 
 indeed one of the worst abused words in the 
 language, and the scientists are partly to blame 
 for it. They have allowed the word to come into 
 
1 o PRO TECTIOXISM. 
 
 use, even among themselves, for a conjectural 
 explanation, or a speculative conjecture, or a zvork- 
 ing hypothesis, or a project which has not yet been 
 tested by experiment, or a plausible and harmless 
 theorem about transcendental relations, or about 
 the way in which men will act un^er certain 
 motives. The newspapers seem often to use the 
 word theoretical as if they meant by it imaginary 
 or fictitious. I use the word theory, however, 
 not in distinction from fact, but, in what I under- 
 stand to be the correct scientific use of the word, 
 to denote a rational description of a group of 
 coordinated facts in their sequence and relations. 
 A theory may, for a special purpose, describe 
 only certain features of facts and disregard others. 
 Hence " in practice," where facts present them- 
 selves in all their complexity, he who has care- 
 lessly neglected the limits of his theory may be 
 astonished at phenomena which present them- 
 selves, but his astonishment will be due to a 
 blunder on his part, and will not be an imputation 
 on the theory. 
 
 8. Now free trade is not a theory in any sense 
 of the word. It is only a mode of liberty ; one 
 form of the assault (and therefore negative) which 
 
WHA T LIBER TV MEANS. 1 1 
 
 the expanding intelligence of the present is 
 making on the trammels which it has inherited 
 from the past. Inside the United States, absolute 
 free trade exists over a continent. No one thinks 
 of it or realizes it. No one " feels" it. We feel 
 only constraint and oppression. If we get liberty 
 we reflect on it only so long as the memory of 
 constraint endures. I have again and again 
 seen the astonishment with which people realized 
 the fact when presented to them that they have 
 been living under free trade all their lives and 
 never thought of it. When the whole \vorld shall 
 obtain and enjoy free trade there will be nothing 
 more to be said about it ; it will disappear from 
 discussion and reflection ; it will disappear from 
 the text-books on political economy as the chap- 
 ters on slavery are disappearing ; it will be as 
 strange for men to think that they might not have 
 free trade as it would be now for an American to 
 think that he might not travel in this country 
 without a passport, or that there ever was a 
 chance that the soil of our western states might 
 be slave soil and not free soil. .It w r ould be as 
 reasonable to apply the \vord theory to the 
 protestant reformation, or to law reform, or to 
 
1 2 PRO TECTIONISM IS 
 
 anti-slavery, or to the separation of church and 
 state, or to popular rights, or to any other cam- 
 paign in the great struggle which we call liberty 
 and progress, as to apply it to free trade. The 
 pro-slavery men formerly did apply it to abolition, 
 and with excellent reason, if the use of it which 1 
 have criticised ever was correct ; for it required 
 great power of realizing in imagination the results 
 of social change, and great power to follow and 
 trust abstract reasoning, for any man bred under 
 slavery to realize, in advance of experiment, the 
 social and economic gain to be won most of all 
 for the whites^by emancipation. It now requires 
 great power of " theoretical conception" for people 
 who have no experience of the separation of 
 church and state to realize its benefits and justice. 
 Similar observations would hold true of all simi- 
 lar reforms. Free trade is a revolt, a conflict, a 
 reform, a reaction and recuperation of the body 
 politic, just as free conscience, free worship, free 
 speech, free press, and free soil have been. It 
 is in no sense a theory. 
 
 9. Protectionism is not a theory in the correct 
 sense of the term, but it comes under some of the 
 popular and incorrect uses of the word. It is 
 
WHAT SORT OF A THEORY? 13 
 
 purely dogmatic and a priori. It is desired to 
 attain a certain object wealth and national pros- 
 perity* Protective taxes are proposed as a means. 
 It must be assumed that there is some connection 
 between protective taxes and national prosperity, 
 some relation of cause and effect, some sequence 
 of expended energy and realized product, between 
 protective taxes and national wealth. If then by 
 theory we mean a speculative conjecture as to 
 occult relations which have not been and can not 
 be traced in experience, protection would be a 
 capital example. Another and parallel example 
 was furnished by astrology, which assumed a 
 causal relation between the movements of the 
 planets and the fate of men, and built up quite an 
 art of soothsaying on this assumption. Another 
 example, paralleling protectionism in another 
 feature, was alchemy, which, accepting as unques- 
 tionable the notion that we want to transmute 
 lead into gold if we can, assumed that there was 
 a philosopher's stone, and set to work to find it 
 through centuries of repetition of the method of 
 " trial and failure. "^-*- 
 
 10. Protectionism then is an ISM, that is, it is ar 
 
 doctrine or system of doctrifte -which offers no 
 
 ^^^ ~ < i . -,^^_ 
 
14 PROTECTIONISM. 
 
 demonstration, and rests upon no facts, but 
 appeals to faith on grounds of its a priori reason- 
 ableness, or the plausibility with which it can be 
 set forth. Of course, if a man should say : " I am 
 in favor of protective taxes because they bring 
 gain to me. That is all I care to know about them, 
 and I shall get them retained as long as I can ; " 
 there is no trouble in understanding him, and 
 there is no use in arguing with him. So far as he is 
 concerned, the only thing to do is to find his vic- 
 tims and explain the matter to them. The only 
 thing which can be discussed is the doctrine of 
 national wealth by protective taxes. This doctrine 
 has the forms of an economic theory. It vies with 
 the doctrine of labor and capital as a part of the 
 science of production. Its avowed purpose is im- 
 personal and disinterested, the same, in fact, as 
 that of political economy. It is not, like free 
 trade, a mere negative position against an inheri- 
 ted system, to which one is led by a study of 
 political economy. It is a species of political 
 economy, and aims at the throne of the science 
 itself. If it is true, it is not a corollary, but a 
 postulate, on which, and by which, all political 
 economy must be constructed. 
 
DOGMA AND SCIENCE. 15 
 
 II. But then, lo ! if the dogma which consti- 
 tutes protectionism national wealth can be 
 produced by protective taxes and can not be pro- 
 duced without them is enunciated, instead of 
 going on to a science of political economy based 
 upon it, the science falls dead on the spot. What 
 can be said about production, population, land, 
 money, exchange, labor and all the rest ? What 
 can the economist learn or do? What function is 
 there for the university or school ? There is 
 nothing to do but to go over to the art of legisla- 
 tion, and get the legislator to put on the taxes. 
 The only questions which can arise are as to the 
 number, variety, size and proportion of the taxes. 
 As to these questions the economist can offer no 
 light. He has no method of investigating them. 
 He can deduce no principles, lay down no laws in 
 regard to them. The legislator must go on in the 
 dark and experiment. If his taxes do not pro- 
 duce the required result, if there turn out to be 
 "snakes** in the tariff which he has adopted, he 
 has to change it. If the result still fails, change it 
 again. Protectionism bars the science of political 
 economy with a dogma, and the only process of 
 the art of statesmanship to which it leads is eter- 
 
\f 
 
 16 PROTECTIONISM. 
 
 nal trial and failure the process of the alchem- 
 ist and of the inventor of perpetual motion. 
 
 D,) Definition of Free Trade and of a Protective 
 Duty. 
 
 12. What then is a protective tax? In order 
 to join issue as directly as possible, I will quote 
 the definition given by a leading protectionist 
 journal,* of both free trade and protection. " The! 
 term free trade, although much discussed, is sel- 
 dom rightly defined. It does not mean the aboli- 
 tion of custom houses. Nor does it mean the 
 substitution of direct for indirect taxation, as a 
 few American disciples of the school have sup- 
 posed. It means such an adjustment of taxes on 
 imports as will cause no diversion of capital, 
 from any channel into which it would otherwise 
 .flow, into any channel opened or favored by the 
 legislation which enacts the customs. A country 
 may collect its entire revenue by duties on im- 
 ports, and yet be an entirely free trade country, so 
 long as it does not lay those duties in such a way 
 as to lead any one to undertake any employment, 
 or make any investment he would avoid in the 
 
 * Philadelphia American, August 7, 1884. 
 
WHA T A PROTECTIVE DUTY IS. 17 
 
 absence of such duties : thus, the customs duties 
 levied by England with a very few exceptions 
 are not inconsistent with her profession of being 
 a country which believes in free trade. They 
 either are duties on articles not produced in En- 
 gland, or they are exactly equivalent to the excise 
 duties levied on the same articles if made at home* 
 They do not lead any one to put his money into 
 the home production of an article, because they do 
 not discriminate in favor of the home producer." 
 
 13. " A protective duty, on the other hand, has 
 for its object to effect the diversion of a part of the 1 
 capital and labor of the people out of the channels 
 in which it would run otherwise, into channelsj 
 favored or created by law/' 
 
 I know of no definitions of these two things 
 which have ever been made by any body which 
 are more correct than these. I accept them and 
 join issue on them. 
 
 E.) Protectionism liaises a Purely Domestic 
 Controversy. 
 
 14. It will be noticed that this definition of a pro- 
 tective duty says nothing about foreigners or about 
 imports. According to this definition, a protect- 
 ive duty is a device for effecting a transforms- 
 
1 8 PROTECTIONISM. 
 
 tion in our own industry. If a taxislcvied at the 
 port of entry on a foreign commodity which is 
 
 actually imported, the tax is paid to the treasury 
 
 ^ 
 and produces revenue. A protective tax is one 
 
 which is laid to act as a bar to importation, in or- 
 der to keep a foreign commodity out. It does not act 
 protectively unless it does act as a bar, and is not 
 a tax on imports but an obstruction to imports. 
 Hence a protective duty is a wall to inclose the 
 domestic producer and consumer, and to prevent 
 the latter from having access to any other source 
 of supply for his needs, in exchange for his prod- 
 ucts, than that one which the domestic producerj 
 controls. The purpose and plan of the device is 
 to enable the domestic producer to levy on the 
 domestic consumer the taxes which the govern- 
 ment has set up as a barrier, but has not collected 
 at the port of e,ntry. Under this device the gov- 
 ernment says : " I do not want the revenue, but I 
 will lay the tax so that you, the selected and 
 favored producer, may collect it." "I do not 
 need to tax the consumer for myself, but I will 
 hold him for you while you tax him." 
 
 F.) " A Protective Duty is not a Tax." 
 15. There are some who say that " a tariff is not 
 
THE BEST JOKE. 19 
 
 a tax," or as one of them said before a Congres- 
 sional Committee : " We do not like to call it so ! " 
 That certainly is the most humorous of all the 
 funny things in the tariff controversy. If a tariff 
 is not a tax, what is it ? In what category does it 
 belong? No protectionist has ever yet told. They 
 seem to think of it as a thing by itself, a Power, a 
 Force, a sort of Mumbo Jumbo whose special 
 function it is to produce national prosperity. They 
 do not appear to have analyzed it, or given them- 
 selves an account of it, sufficiently to know what 
 kind of a thing it is or how it acts. Any one who 
 says that it is not a tax must suppose that it costs 
 nothing, that it produces an effect without an ex- 
 penditure of energy. They do seem to think that 
 if Congress will say : " Let a tax of per cent, be 
 laid on article A," and if none is imported, and 
 therefore no tax is paid at the custom house, 
 national industry will be benefited and wealth 
 secured, and that there will be no cost or outgo. 
 If that is so, then the tariff is magic. We have 
 found the philosopher's stone. Our congressmen 
 wave a magic wand over the country and say : 
 " Not otherwise provided for, 150 per cent.," and, 
 presto! there we have wealth. Again they say: 
 
20 PROTECTIONISM. 
 
 11 Fifty cents a yard and fifty percent, ad valorem; " 
 and there we have prosperity ! If we should build 
 a wall along the coast to keep foreigners and their 
 goods out, it would cost something. If we main- 
 tained a navy to blockade our own coast for the 
 same purpose, it would cost something. Yet it is 
 imagined that if we do the same by a tax it costs 
 nothing. 
 
 1 6. This is the fundamental fallacy of protection 
 to which the analysis will bring us back again and 
 again. Scientifically stated it is \\\?& protectionism 
 sins against the conservation of energy. More simply 
 stated it is that the protectionist either never sees or 
 does not tell the other side of the account, the cost, 
 the outlay for the gains which he alleges from pro- 
 tection, and that when these are examined and 
 weighed they are sure to vastly exceed the gains, 
 if the gains were real, even taking no account of 
 the harm to national growth which is done by 
 restriction and interference. 
 
 17. There are only three ways in which a man 
 can part with his product, and different kinds of 
 taxes fall under different modes of alienating 
 one's goods. 1st. He may exchange his product 
 for the product of others. Then he parts with 
 
A TAX, WHA T KIND OF OUTLA Y. 21 
 
 his property voluntarily, and for an equivalent. 
 Taxes which are paid for peace, order and secur- 
 ity, fall under this head. 2d. He may give his 
 product away. Then he parts with it voluntarily 
 without an equivalent. Taxes which are volun- 
 tarily paid for schools, libraries, parks, etc., etc., 
 fall under this head. 3d. He may be robbed of 
 it. Then he parts with it involuntarily and with- 
 out an equivalent. Taxes which are protective 
 fall under this head. The analysis is exhaustive, 
 and there is no other place for them. Protective 
 taxes are those which a man pays to his neighbor 
 to hire him (the neighbor) to carry on his own 
 business. The first man gets no equivalent ( 108). 
 Hence any one who says that a tariff is not 
 a tax would have to put it in some such category 
 as tribute, plunder, or robbery. In order, then, 
 that we may not give any occasion for even an 
 unjust charge of using hard words, let us go back 
 and call it a tax. 
 
 1 8. In any case it is plain that we have before us 
 the case of two Americans. The protectionists 
 who try to discuss the subject always go off to 
 talk English politics and history, or Ireland, or 
 India, or Turkey. I shall not follow them. I 
 
22 PROTECTIONISM. 
 
 shall discuss the case between two Americans, 
 which is the only case there is. Whether English- 
 men like our tariff or not is of no consequence. 
 As a matter of fact, Englishmen seem to have come 
 to the opinion that if Americans will take their 
 own home market as their share, and will keep out 
 of the world's market, they (the Englishmen) will 
 agree to the arrangement ; but it is immaterial 
 whether they agree, or are angry. The only ques- 
 tion for us is : What kind of an arrangement is 
 it for one American to tax another American? 
 How does it work? Who gains by it? How 
 does it affect our national prosperity? These and 
 these only are the questions which I intend to 
 discuss. 
 
 19. I shall adopt two different lines of investiga- 
 tion. First, I shall examine protectionism on its 
 own claims and pretensions, taking its doctrines 
 and claims for true, and following them out to see 
 whether they will produce the promised results ; 
 and second, I shall attack protectionism adversely, 
 and controversially. If anyone proposes a device 
 for the public good, he is entitled to candid and 
 patient attention, but he is also under obligation 
 to show how he expects his scheme to work, 
 
OBLIGA TION OF THE REFORMER 23 
 
 what forces it will bring into play, how it will use 
 them, etc. The joint stock principle, credit insti- 
 tutions, cooperation, and all similar devices must 
 be analyzed and the explanation of their advan- 
 tage, if they offer any, must be sought in the prin- 
 ciples which they embody, the forces they em- 
 ploy, the suitableness of their apparatus. We 
 ought not to put faith in any device (e. g. bi-met- 
 alism, socialism) unless the proposers offer an ex- 
 planation of it which will bear rigid and pitiless 
 examination ; for, if it is a sound device, such ex- 
 amination will only produce more and more 
 thorough conviction of its merits. I shall there- 
 fore first take up protectionism just as it is offered, 
 and test it, as any candid inquirer might do, to 
 see whether, as it is presented by its advocates, it 
 has any claims to confidence. 
 
CHAPTER II. 
 
 PROTECTIONISM EXAMINED ON ITS OWN GROUNDS. 
 
 f 
 
 20. It is the peculiar irony in all empirical de- 
 vices in social science that they not only fail of 
 the effect expected of them, but that they pro- 
 duce the exact opposite. Paper-money is expected 
 to help the non-capitalist and the debtor and to 
 make business brisk. It ruins the no/i-capitalists 
 and the debtors, and reduces industry and com- 
 merce to a standstill. Socialistic devices are ex- 
 pected to bring about equality and universal hap- 
 piness. They produce despotism, favoritism, in- 
 equality, and universal misery. The devices are, 
 in their operation, true to themselves. They act 
 just as an unprejudiced examination of them 
 should have led any one to expect that they would 
 act, or just as a limited experience has shown that 
 they must act. If protectionism is only another 
 case of the same kind, an examination of it on 
 its own grounds must bring out the fact that it 
 
THE ASSUMPTIONS. 2$ 
 
 will issue in crippling industry, diminishing capi- 
 tal, and lowering the average of comfort. Let us 
 see. 
 
 A.) Assumptions in Protectionism. 
 
 21. Obviously the doctrine includes two as- 
 sumptions. /The first is, that if we are left to our- 
 selves, each to choose, under liberty, his line of 
 industrial effort, and to use his labor and capital, 
 under the circumstances of the country, as best 
 he can, we shall fail of our highest prosperity. 
 ? Second, that, if Congress will only tax us [prop- 
 erly] we can be led up to higher prosperity. 
 Hence it is at once evident that free trade and 
 protection here are not on a level. No free trader 
 will affirm that he has a device for making the 
 country rich, or saving it from hard times, any 
 more than a respectable physician will tell us that 
 he can give us specifics and preventives to keep 
 us well. On the contrary, so long as men live, 
 they will do foolish things, and they will have to 
 bear the penalty, but if they are free, they will 
 commit only the follies which are their own, and 
 they will bear the penalties only of those. The 
 protectionist begins with the premiss that we 
 
26 PROTECTIONISM. 
 
 shall make mistakes, and that is why he, who 
 knows how to make us go right, proposes to take 
 us in hand. He is like the doctor who can give 
 us just the pill we need to " cleanse our blood " 
 and " ward off chills." Hence either prosperity in a 
 free trade country, or distress in a protectionist 
 country, is fatal to protectionism, while distress in 
 a free trade country, or prosperity in a protec- 
 tionist country proves nothing against free trade. 
 Hence the fallacy of all Mr. R. P. Porter's letters 
 is obvious. ( 52, 92, 102, 154.) 
 
 22. The device by which we are to be made 
 better than ourselves is to select some of our- 
 selves, who certainly are not the best business 
 men among ourselves, to go to Washington, and 
 there turn around and tax ourselves blindly, or, 
 if not blindly, craftily and selfishly. Surely this 
 would be the triumph of stupidity and ignorance 
 over intelligent knowledge, enterprise and energy. 
 The motive which would control each of us, if we 
 were free, would be the hope of the greatest gain. 
 We should have to put industry, prudence, econ- 
 omy and enterprise into our business. If we 
 failed, it would be through error. How is the 
 congressional interference to act? How is it to 
 
7 HE CORRECTOR OF OUR BLUNDERS. 27 
 
 meet and correct our error? It can appeal to no 
 other motive than desire for profit, and can only 
 offer us a profit where there was none before, if 
 we will turn out of the industry which we have 
 selected, into one which we do not know. It 
 offers a greater profit there only by means of 
 what it takes from somebody else and some- 
 where else. Or, is congressional interference to 
 correct the errors of John, James and William, 
 and to make the idle industrious and the extrav- 
 agant prudent ? Any one who believes it must 
 believe that the welfare of mankind is not depend- 
 ent on the reason and conscience of the interested 
 persons themselves, but on the caprices of blun- 
 dering ignorance, embodied in a selected few, or 
 on the trickery of lobbyists, acting impersonally 
 and at a distance. 
 
 B.) Necessary Conditions of Successful Protective 
 Legislation. 
 
 23. Suppose, however, that it were true that 
 Congress had the power (by some exercise of the 
 taxing function) to influence favorably the indus- 
 trial development of the country: is it not true 
 that men of sense would demand to be satisfied 
 on three points, as follows ? 
 
a8 PROTECTIONISM. 
 
 24 (a.) If Congress can do this thing, and is 
 going to try it, ought it not, in order to succeed, to 
 have a distinct idea of what it is aiming at and 
 proposes to do? Who would have confidence in 
 any man who should set out on an enterprise and 
 who did not satisfy this condition ? Has Con- 
 gress ever satisfied it ? Never. They have never 
 had any plan or purpose in their tariff legislation. 
 Congress has simply laid itself open to be acted 
 upon by the interested parties, and the product of 
 its tariff legislation has been simply the resultant 
 of the struggles of the interested cliques with each 
 other, and of the log rolling combinations which 
 they have been forced to make among themselves. 
 In 1882 Congress did pay some deference, real or 
 pretended, to the plain fact that it was bound, if 
 it exercised this mighty power and responsibility, 
 to bring some intelligence to bear on it, and it 
 appointed a Tariff Commission which spent sev- 
 eral months in collecting evidence. This Com- 
 mission was composed of protectionists with one 
 exception. It recommended a reduction of 25 
 per cent, in the tariff, and said : " Early in its de- 
 liberations the Commission became convinced 
 that a substantial reduction of tariff duties is de- 
 
HO W CONGRESS HELPS US. 29 
 
 manded, not by a mere indiscriminate popular 
 clamor, but by the best conservative opinion of 
 the country/' " Excessive duties are positively 
 injurious to the interests which they are supposed 
 to benefit. They encourage the investment of 
 capital in manufacturing enterprises by rash and 
 unskilled speculators, to be followed by disaster to 
 the adventurers and their employes, and a pleth- 
 ora of commodities which deranges the opera- 
 tions of skilled and prudent enterprise." ( in.) 
 This report was entirely thrown aside, and Con- 
 gress, ignoring it entirely, began again in exactly 
 the old way. The Act of 1883 was not even 
 framed by or in Congress. It was carried out 
 into the dark, into a conference committee/ 
 where new and gross abuses were put into the 
 bill under cover of a pretended revision and re- 
 duction. When a tariff bill is before Congress, 
 the first draft starts with a certain rate on a cer- 
 tain article, say 20 per cent. It is raised by 
 amendment to 50, the article is taken into a 
 combination and the rate put up. to 80 per cent. ; 
 the bill is sent to the other house, and the rate on 
 
 * Taussig : History of the Existing Tariff, 78 fg. 
 
3 PROTECTIONISM. 
 
 this article cut down again to 40 per cent. ; on 
 conference between the two houses the rate is 
 fixed at 60 per cent. He who believes in the pro- 
 tectionist doctrine must, if he looks on at that 
 proceeding, believe that the prosperity of the 
 country is being kicked around the floor of Con- 
 gress, at the mercy of the chances which are at 
 last to determine with what per cent, of tax these 
 articles will come out. And what is it that de- 
 termines with what tax any given article will 
 come out? Any intelligent knowledge of indus- 
 try ? Not a word of it. Nothing in the case of 
 a given tax on a given article, but just this: 
 " Who is behind it? " The history of tariff legis- 
 lation by the Congress of the United States, 
 throws a light upon the protective doctrine which 
 is partly grotesque and partly revolting. 
 
 25 (b.) If Congress can exert the supposed 
 beneficent influence on industry, ought not Con- 
 gress to understand the force which it proposes to 
 use ? Ought it not to have some rules of protective 
 legislation so as to know in what cases, within 
 what limits, under what conditions, the device 
 can be effectively used? Would that not be a 
 reasonable demand to make of any man who 
 
DISTRESS WITHOUT FREE TRADE. 31 
 
 should propose a device for any purpose? Con- 
 gress has never had any knowledge of the way in 
 which the taxes which it passed were to do this 
 beneficent work. It has never had, and has 
 never seemed to think that it needed to get, any 
 knowledge of the mode of operation of protective 
 taxes. It passes taxes, as big as the conflicting 
 interests will allow, and goes home, satisfied that 
 it has saved the country. What a pity that phil- 
 osophers, economists, sages and moralists should 
 have spent so much time in elucidating the con- 
 ditions and laws of human prosperity ! Taxes can 
 do it all. 
 
 26 (c.) If Congress can do what is affirmed and 
 is going to try it, is it not the part of common 
 sense to demand tha&seme tests be applied to the 
 experiment aftejr\ a/few years to see whether it is 
 
 really doing as was^expected ? In the campaign of 
 1880 it was said that iT~ Hancock was elected we 
 should have free trade, wages would fall, factories 
 would be closed, etc., etc. Hancock was not 
 elected, we did not get any reform of the tariff, 
 and yet in 1884 wages were falling, factories were 
 closed, and all the other direful consequences 
 which were threatened had come to pass. Brad- 
 
3 * PRO TECTIONISM. 
 
 street's made investigations in the winter of 1884-5 
 which showed that 316,000 workmen, 13 per cent, 
 of the number employed in manufacturing in 
 1880, were out of work, 17,550 on strike, and that 
 wages had fallen since 1882 from 10 to 40 per 
 cent., especially in the leading lines of manufact- 
 uring which are protected. What did these 
 calamities all prove then? If we had had any 
 revision of the tariff, should we not have had 
 these things alleged again and again as results of 
 it ? Did they not then, in the actual case, prove 
 the folly of protection? Oh! no, that would be 
 attacking the sacred dogma, and the sacred dogma 
 is a matter of faith, so that, as it never had 
 any foundation in fact or evidence, it has just as 
 much after the experiment has failed as before 
 the experiment was made. 
 
 27. If, now, it was possible to devise a scheme 
 of legislation which should, according to protec- 
 tionist ideas, be just the right jacket of taxation 
 to fit this country to-day, how long would it fit ? 
 Not a week. Here are 55 millions of people on 
 3-} million square miles of land. Every day new 
 lines of communication are opened, new discover- 
 ies made, new inventions produced, new processes 
 
WHA T THE TARIFF DECISIONS MEAN. 33 
 
 applied, and the consequence is that the indus- 
 trial system is in constant flux and change. How, 
 if a correct system of protective taxes was a prac- 
 ticable thing at any given moment, could Con- 
 gress keep up with the changes and readaptations 
 which would be required. The notion is prepos- 
 terous, and it is a monstrous thing, even on the 
 protectionist hypothesis, that we are living under 
 a protective system which was set up in 1864. 
 The weekly tariff decisions by the treasury 
 department may be regarded as the constant 
 attempts that are required to fit that old system 
 to present circumstances, and, as it is not possible 
 that new fabrics, new compounds, and new pro- 
 cesses should find a place in schedules which were 
 made twenty years before they were invented, 
 those decisions carry with them the fate of scores 
 of ne.w industries which figure in no census, and are 
 taken into account by no congressman. There- 
 fore, even if we believed that the protective doc- 
 trine was sound, and that some protective system 
 was beneficial, and that the one which we have 
 was the right one when it was made, we should 
 be driven to the conclusion that one which is 
 twenty years old is sure to be injurious to-day. 
 
34 PROTECTIONISM. 
 
 28. There is nothing then in the legislative 
 machinery, by which the tariff is to be made, 
 which is calculated to win the confidence of a 
 man of sense, but every thing to the contrary ; and 
 the experiments of such legislation which have 
 been made, have produced nothing but warnings 
 against the device. Instead of offering any 
 reasonable ground for belief that our errors will 
 be corrected and our productive powers increased, 
 an examination of the tariff as a piece ( of legisla- 
 tion, offers to us nothing but a burden, which 
 must cripple any economic power which we have. 
 
 C.) Examination of the Means Proposed, Viz., 
 
 Taxes. 
 
 29. Every tax is a burden, and in the nature of 
 the case can be nothing else. In mathematical 
 language, every tax is a quantity affected by a 
 minus sign. If it gets peace and security, that is, 
 if it represses crime and injustice and prevents 
 discord, which would be economically destructive, 
 then it is a smaller minus quantity than the one 
 which would otherwise be there, and that is the 
 gain by good government. Hence, like every 
 other outlay which we make, taxes must be con- 
 trolled by the law of economy to get the best 
 
DISTRUST TAXATION! 35 
 
 and most possible for the least expenditure. In- 
 stead of regarding public expenditure carelessly, 
 we should watch it jealously. Instead of looking 
 at taxation as conceivably a good, and certainly 
 not an ill, we should regard every tax as on the 
 defensive, and every cent of tax as needing justi- 
 fication. If the statesman exacts any more than 
 is necessary to pay for good government econom- 
 ically administered, he is incompetent, and fails 
 in his duty. I have been studying political 
 economy almost exclusively for the last fifteen 
 years, and when I look back over that period and 
 ask myself what is the most marked effect which 
 I can perceive on my own opinion, or on my stand- 
 point, as to social questions, I find that it is this : 
 I am convinced that nobody yet understands the 
 multiplied and complicated effects which are pro- 
 duced by taxation. I am under the most pro- 
 found impression of the mischief which is done by 
 taxation, reaching, as it does, to every dinner- 
 table and to every fire-side. The effects of taxa- 
 tion vary with every change in the industrial system 
 and the industrial status, and they are so compli- 
 cated that it is impossible to follow, analyze, and 
 systematize them ; but out of the study of the 
 
3 6 PROTECTIONISM. 
 
 subject there arises this firm conviction : taxation 
 is crippling, shortening, reducing all the time, over 
 and over again. 
 
 30. Suppose that . a man has an income of 
 $1,000, of which he has been saving $100 per an- 
 num with no tax. Now a tax of $10 is demanded 
 of him, no matter what kind of a tax or how laid. 
 Is he to get the tax out of the $900 expenditure 
 or out of the $100 savings? If the former, then 
 he must cut down his diet, or his clothing, or his 
 house accommodation ; that is, lower his standard 
 of comfort. If the latter, then he must lessen his 
 accumulation of capital ; that is, his provision for 
 the future. Either way his welfare is reduced and 
 can not be otherwise affected, and, through the 
 general effect, the welfare of the community is 
 reduced by the tax. Of course it is immaterial 
 that he may not know the facts. The effects are 
 the same. In this view of the matter it is plain 
 what mischief is done by taxes which are laid to 
 buy parks, libraries, and all sorts of grand things. 
 The tax-layer is not providing public order. He 
 is spending other people's earnings for them. He 
 is deciding that his neighbor shall have less 
 clothes and more library or park. But when we 
 
A, LESS CLOTHES ; B, MORE PROFITS. 37 
 
 come to protective taxes the. abuse is monstrous. 
 The legislator who has in his hands this power of | 
 taxation, uses it to say that one citizen shall have 
 less clothes in order that he may contribute to the 
 profits of another citizen's private business. 
 
 31. Hence if we look at the nature of taxation, 
 and if we are examining protectionism from its 
 own standpoint, under the assumption that it is 
 true, instead of finding any confirmation of its 
 assumptions, in the nature of the means which it 
 proposes to use, we find the contrary. Grant- 
 ing that people make mistakes and fail of the 
 highest prosperity which they might win when 
 they'act freely, we see plainly that more taxes 
 can not help to lift them up or to correct their 
 errors ; on the contrary, all taxation, beyond what 
 is necessary for an economical administration of 
 good government, is either luxurious or wasteful, 
 and if such taxation could tend to wealth, waste 
 would make wealth. 
 
 D.) Examination of the plan of Mutual 
 Taxation. 
 
 32. Suppose then that the industries and sec- 
 tions all begin to tax each other as we see that 
 they do under protection. Is it not plain that 
 
v/ 
 
 3 8 PROTECTIONISM. 
 
 the taxing operation can do nothing but transfer 
 products, never by any possibility create them ? 
 The object of the protective taxes is to " effect 
 die diversion of a part of the capital and labor 
 of the country from the channels in which it 
 would run otherwise." To do this it must find a 
 fulcrum or point of reaction, or it can exert no 
 force for the effect it desires. The fulcrum is 
 furnished by those who pay the tax Take a case. 
 Pennsylvania taxes New England on every ton of 
 iron and coal used in its industries. Ohio taxes 
 New England on all the wool obtained from that 
 state for its industries.* New England taxes Ohio 
 and Pennsylvania on all the cottons and woolens 
 which it sells to them. What is the net final 
 result? It is mathematically certain that the 
 only result can be that (i) New England gets back 
 just all she paid (in which case the system is nil, 
 save for the expense of the process and the 
 limitation it imposes on the industry of all), or, 
 
 * The wool growers held a convention at St. Louis May 28, 
 1885, at which they estimated their loss by the reduction of the 
 tax on wool in 1883, or the difference between what they got by 
 this tax before that date and after, at ninety million dollars (N. 
 Y. Times, May 29). If that sum is what they lost, it is what the 
 consumers gained. They are very angry, and will not vote for 
 any one who will not help to re-subject the consumers to this 
 tribute to them. 
 
THE WAY A KING DID IT. 39 
 
 (2) that New England does not get back as much 
 as she paid (in which case she is tributary to the 
 others), or, (3) that she gets back more than she 
 paid (in which case she levies tribute on them). 
 Yet, on the protectionist notion, this system 
 extended to all sections, and embracing all indus- 
 tries, is the means of producing national pros- 
 perity. When it is all done, what does it amount 
 to except that all Americans must support all 
 Americans? How can they do it better than for 
 each to support himself to the best of his ability ? 
 Then, however, all the assumptions of protection- 
 ism must be abandoned as false. 
 
 33. In 1676 King Charles II. granted to his 
 natural son, the Duke of Richmond, a tax of a 
 shilling a chaldron on all the coal which was 
 exported from the Tyne. We regard such a grant 
 as a shocking abuse of the taxing power. It is, 
 however, a very interesting case because the mine- 
 owner and the tax-owner were two separate per. 
 sons, and the tax can be examined in all its separ- 
 ate iniquity. If, as I suppose was the case, the 
 Tyne valley possessed such superior facilities for 
 producing coal that it had a qualified monopoly, 
 the tax fell on the coal mine owner (landlord^ ; 
 
40 PROTECTIONISM. 
 
 that is, the king transferred to his son part of the 
 property which belonged to the Tyne coal own- 
 ers. In that view the case may come home 
 to some of our protectionists as it would not 
 if the tax had fallen on the consumers. If 
 Congress had pensioned General Grant by 
 giving him 75 cents a ton on all the coal mined 
 in the Lehigh Valley, what protests we should 
 have heard from the owners of coal lands in 
 that district ! If the king's son, however, had 
 owned the coal mines, and worked them him- 
 self, and if the king had said : " I will author- 
 ize you to raise the price of your coal a shil- 
 ling a chaldron, and, to enable you to do it, I 
 will myself tax , all coal but yours a shilling a 
 chaldron/' then the device would have been 
 modern and enlightened and American. We 
 have done just that on emery, copper and nickel. 
 Then the tax comes out of the consumer. Then 
 it is not, according to the protectionist, harmful, 
 but the key to national prosperity, the thing 
 which corrects the errors of our incompetent self- 
 will, and leads us up to better organization of our 
 industry than we, in our unguided stupidity, 
 could have made, 
 
WHAT AN INDUSTRY 1$. 41 
 
 E.) Examination of the Proposal to " Create an 
 Industry." 
 
 34. The protectionist says, however, that he is 
 going to create an industry. Let us examine this 
 notion also from his standpoint, assuming the 
 truth of his doctrine, and see if we can find any 
 thing to deserve confidence. A protective tax, 
 according to the protectionist's definition ( 13) 
 " has for its object to effect the diversion of a 
 part of the labor and capital of the people * * * ^ 
 into channels favored or created by law." If we 
 follow out this proposal, we shall see what those 
 channels are, and shall see whether they are such 
 
 as to make us believe that protective taxes can 
 increase wealth. 
 
 35. [What is an industry? Some people will 
 answer: It is an enterprise which gives employ- ^ 
 ment. Protectionists seem to hold this viewj and 
 they claim that they " give work " to laborers 
 when they make an industry. On that notion we 
 live to work ; we do not work to live. But we do 
 not want work. We have too much work. We 
 want a living ; and work is the inevitable but dis- 
 agreeable price we must pay. Hence we want as 
 much living at as little price as possible. We 
 
42 PROTECTIONISM. 
 
 shall see that the protectionist does "make work" 
 in the sense of lessening the living and increasing 
 the price. But if we want a living we want capi- 
 tal. If an industry is to pay wages, it must be 
 backed up by capital. Therefore protective 
 taxes, if they were to increase the means of living, 
 would need to increase capital. How can taxes 
 increase capital? Protective taxes only take 
 from A to give to B. Therefore, if B by 
 this arrangement can extend his industry and 
 " give more employment," A's power to do the 
 same is diminished in at least an equal degree. 
 Therefore, even on that erroneous definition of 
 an industry, there is no hope for the protection- 
 ist. 
 
 ' '36. An industry is an organization of labor and 
 capital for satisfying some need of the community. 
 It is not an end in itself. It is not a good thing 
 to have in itself. It is not a toy or an ornament. 
 If we could satisfy our needs without it we should 
 be better off, not worse off. How then can we 
 create industries? 
 
 37. If any one will find, in the soil of a district, 
 some new power to supply human needs, he can 
 endow that district with a new industry. If he 
 
NOT ENOUGH WORK TO DO. 43 
 
 will invent a mode of treating some natural de- 
 posit, ore or clay for instance, so as to provide a 
 tool or utensil which is cheaper and more con- 
 venient than what is in use, he can create an 
 industry. If he will find out some new and better 
 way to raise cattle or vegetables, which is, per- 
 haps, favored by the climate, he can do the same. 
 If he invents some new treatment of wool, or 
 cotton, or silk, or leather, or makes a new combi- 
 nation which produces a more convenient or 
 attractive fabric, he may do the same. The tele- 
 phone is a new industry. What measures the 
 gain of it? Is it the " employment " of certain 
 persons in and about telephone offices ? The gain 
 is in the satisfaction of the need of communica- 
 tion between people at less cost of time and 
 labor. It is useless to multiply instances. It can 
 be seen what it is to " create an industry." It j 
 takes brains and energy to do it. How can taxes 
 do it? 
 
 38. Suppose that we create an industry even in 
 this sense, What is the gain of it ? The people of 
 Connecticut are now earning their living by 
 employing their labor and capital in certain parts 
 of the industrial organization. They have changed 
 
44 PROTECTIONISM. 
 
 their " industries " a great many times. If it 
 should be found that they had a new and better 
 chance hitherto undeveloped, they might all go 
 into it. To do that they must abandon what they 
 are now doing. They would not change unless 
 gains to be made in the new industry were greater. 
 Hence the gain is the difference only between the 
 profits of the old and the profits of the new. The 
 protectionists, however, when they talk about 
 " creating an industry," seem to suppose that the 
 total profit of the industry (and some of them 
 seem to think that the total expenditure of capi- 
 tal) measures their good work. In any case, then, 
 even of a true and legitimate increase of industrial 
 power and opportunity, the only gain would be a 
 margin. But, by our definition, "a protective 
 duty has for its object to effect the diversion of a 
 part of the capital and labor of the people out of 
 j the channels in which it would otherwise run." 
 ' Plainly this device involves coercion. People 
 would need no coercion to go into a new industry 
 which had a natural origin in new industrial power 
 or opportunity. No coercion is necessary to make 
 men buy dollars at 98 cents apiece. The case 
 for coercion is when it is desired to make them 
 
BUYING DOLLARS TOO DEARLY. 45 
 
 buy dollars at 101 cents apiece. Here the states" 
 man with his taxing power is needed, and can do 
 something. What? He can say: "If you will 
 buy a dollar at 101 cents, I can and will tax John 
 over there two cents for your benefit ; one to make 
 up your loss and the other to give you a profit." 
 Hence, on the protectionist' sown doctrine, his device 
 is not needed, and can not come into use, when a 
 new industry is created in the true and only rea- 
 sonable sense of the words, but only when and 
 because he is determined to drive the labor and capi- 
 tal of the country into a disadvantageous and waste- 
 ful employment. 
 
 39. Still further, it is obvious that the pro- 
 tectionist, instead of " creating a new industry," 
 has simply taken one industry and set it as a parasite 
 to live upon another. Industry is its own reward. 
 A man is not to be paid a premium by his neigh- J 
 bqrs for earning his own living. A factory, an 
 insane asylum, a school, a church, a poor-house, 
 and a prison can not be put in the same economic 
 category. We know that the community must 
 be taxed to support insane asylums, poor-houses, 
 and jails. When we come upon such institutions 
 we see them with regret. . They arc wasting 
 
46 PROTECTIONISM. 
 
 capital. We know that the industrious people 
 all about, who are laboring and producing, must 
 part with a portion of their earnings to supply the 
 waste and loss of these institutions. Hence the 
 bigger they are the sadder they are. 
 
 40. As for the schools and churches, we know 
 that society must pay for and keep up its own 
 conservative institutions. They cost capital and 
 do not pay back capital directly, although they 
 do indirectly, and in the course of time, in ways 
 which we could trace out and verify, if that were 
 our subject. Here, then, we have a second class 
 of institutions. 
 
 41. But the factories and farms and foundries 
 are the productive institutions which must pro- 
 vide the support of these consuming institu- 
 tions. If the factories, etc., put themselves on 
 a line with the poor-houses, or even with the 
 schools, what is to support them and all the rest 
 too? They have nothing behind them. If in 
 any measure or way they turn into burdens and 
 objects of care and protection, they can plainly 
 do it only by part of them turning upon the other 
 part, and this latter part will have to bear the 
 burden of all the consuming institutions, including 
 
CONSUMING INDUSTRIES. 47 
 
 ~N 
 
 the consuming industries. For a protected factory ^ 
 is not a producing industry. It is a consuming ' 
 industry! If a factory is (as the protectionist 
 alleges) a triumph of the tariff, that is, if it would 
 not be but for the tariff (and otherwise he has 
 nothing to do with it), then it is not producing ; / 
 it is consuming. It is a burden to be borne. The I 
 bigger it is the sadder it is. 
 
 42. If a protectionist shows me a woolen mill 
 and challenges me to deny that it is a great and 
 valuable industry, I ask him whether it is due to 
 the tariff. If he says no, then I will assume that 
 it is an independent and profitable establishment, 
 but then it is out of this discussion as much as a 
 farm or a doctor's practice. If he says yes, then 
 I answer that the mill is not an industry at all. 
 We pay sixty per cent, tax on cloth simply in order 
 that that mill may be. It is not an institution for 
 getting us cloth, for, if we went into the market 
 with the same products which we take there now 
 and if there were no woolen mill, we should get 
 all the cloth we want, but the mill is simply an 
 institution for making cloth cost per yard sixty per 
 cent, more of our products than it otherwise would. 
 That is the one and only function which the mill 
 
48 PROTECTIONISM. 
 
 has added, by its existence, to the situation. I 
 have called such a factory a " nuisance." The 
 word has been objected to. The word is of no 
 consequence. He who, when he goes into a de- 
 bate, begins to whine and cry as soon as the blows 
 get sharp, should learn to keep out. What I 
 meant was this : A nuisance is something which 
 by its existence and presence in society works loss 
 and damage to the society works against the 
 general interest, not for it. A factory which gets 
 in the way and hinders us from attaining the 
 comforts which we are all trying to get, which 
 makes harder the terms of acquisition when we 
 are all the time struggling by our arts and sciences 
 to make those terms easier, is a harmful thing, 
 and noxious to the common interest. 
 
 43. Hence, once more, starting from the pro- 
 tectionist's hypothesis, and assuming his own doc- 
 trine, we find that he can not create an industry. 
 He only fixes one industry as a parasite upon 
 another, and just as certainly as he has intervened 
 in the matter at all, just so certainly has he forced 
 labor and capital into less favorable employment 
 than they would have sought if he had let them 
 alone. When we ask which " channels" those 
 
WASTE MAKES WEALTH. 49 
 
 are which are to be " favored or created by 
 law," we find that they are, by the hypothesis, 
 and by the whole logic of the protectionist sys- 
 tem, the industries which do not pay. The pro- 
 tectionists propose to make the country rich by 
 laws which shall favor or create these industries, 
 but these industries can only waste capital, so 
 that if they are the source of wealth, zvaste is the 
 source of wealth. Hence the protectionist's 
 assumption that by his system he could correct 
 our errors and lead us to greater prosperity than 
 we would have obtained under liberty, has failed 
 again, and we find that he wastes what power 
 we do possess. 
 
 F.) Examination, of the Proposal to Develop 
 our Natural Resources. 
 
 44. "But," says the protectionist, "do. you 
 mean to say that, if we have an iron deposit in our 
 soil, it is not wise for us to open and work it ? " 
 " You mean, no doubt/' I reply, " open and work 
 it under protective help and stimulus ; for, if there 
 is an iron deposit, the United States does not own 
 it. Some man owns it. If he wants to open and 
 work it, we have nothing to do but wish him 
 God-speed," "Very well," he says, " understand 
 
50 PROTECTIONISM. 
 
 it that he needs protection/' Let us examine 
 this case then, and still we will do it assuming the 
 truth of the protectionist doctrine. Let us see 
 where we shall come out. 
 
 The man who has discovered iron (on the pro- 
 tectionist doctrine), when there is no tax, does 
 not collect tools and laborers and go to work. He 
 goes to Washington. He visits the statesman, 
 and a dialogue takes place. 
 
 Iron man. " Mr. Statesman, I have found an 
 iron deposit on my farm." 
 
 Statesman. " Have you, indeed ? That is good 
 news. Our country is richer by one new natural 
 resource than we have supposed/' 
 
 Iron man. " Yes, and I now want to begin 
 mining iron/' 
 
 Statesman. " Very well, go on. We shall be glad 
 to hear that you are prospering and getting rich." 
 
 Iron man. " Yes, of course. But I am now 
 earning my living by tilling the surface of the 
 ground, and I am afraid that I can not make as 
 much at mining as at farming." 
 
 Statesman. " That is indeed another matter. 
 Look into that carefully and do not leave a better 
 industry for a worse/' 
 
NE W NA TURAL RE SO URGES. 5 1 
 
 Iron man. " But I want to mine that iron. It 
 does not seem right to leave it in the ground 
 when we are importing iron all the time, but I 
 can not see as good profits in it at the present 
 price for imported iron as I am making out of 
 what I raise on the surface. I thought that per- 
 haps you would put a tax on all the imported 
 iron so that I could get more for mine. Then I 
 could see my way to give up farming and go to 
 mining/' 
 
 Statesman. " You do not think what you ask. 
 That would be authorizing you to tax your neigh- 
 bors, and would be throwing on them the risk of 
 working your mine, which you are afraid to take 
 yourself." 
 
 Iron man (aside). " I have not talked the right 
 dialect to this man. I must begin all over again. 
 (Aloud). Mr. Statesman, the natural resources of \ V 
 this continent ought to be developed. American 
 industry must be protected. The American la- 
 borer must not be forced to compete with the 
 pauper labor of Europe." 
 
 Statesman. " Now I understand you. Now 
 you talk business. Why did you not say so be- 
 fore ? How much tax do ou want ? " 
 
52 PROTECTIONISM. 
 
 The next time that a buyer of pig iron goes to 
 market to get some, he finds that it costs thirty 
 bushels of wheat per ton instead of twenty. 
 
 " What has happened to pig-iron? " says he. 
 
 "Oh! haven't you heard?" is the reply. "A 
 new mine has been found down in Pennsylvania. 
 We have got a new 'natural resource.' " 
 
 " I haven't got a new 'natural resource,' " says 
 he. " It is as bad for me as if the grasshoppers 
 had eaten up one-third of my crop." 
 
 45. That is just exactly the significance of a new 
 resource on the protectionist doctrine. We had 
 the misfortune to find emery here. At once a tax 
 was put on it which made it cost more wheat, cot- 
 ton, tobacco, petroleum, or personal services per 
 pound than ever before. A new calamity befell 
 us when we found the richest copper mines in the 
 world in our territory. From that time on it cost 
 us five (now four) cents a pound more than before. 
 By another catastrophe we found a nickel mine, 
 thirty cents (now fifteen) a pound tax ! Up to 
 this time we have had all the tin that we wanted 
 above ground, because beneficent nature has re- 
 frained from putting any underground in our terri- 
 tory. In the metal schedule, where the metals 
 
RESOURCES ARE CALAMITIES. 53 
 
 which we unfortunately possess are taxed from 
 forty to sixty per cent., tin alone is free. Every 
 little while a report is started that tin has been 
 found. Hitherto these reports have happily all 
 proved false. It is now said that tin has been 
 -found in West Virginia and Dakotah. We have 
 reason to devoutly hope that this may prove 
 false, for, if it should prove true, no doubt the 
 next thingwill be forty per cent, tax on tin. The 
 mine-owners say that they want to exploit the 
 mine. They do not. They want to make the 
 mine an excuse to exploit the taxpayers. 
 
 46. Therefore, when the protectionist asks 
 whether we ought not by protective taxes to 
 force the development of our own iron mines, the 
 answer is, that, on his own doctrine, he has 
 developed a new philosophy, hitherto unknown, 
 by which " natural resources " become national 
 calamities, and the more a country is endowed by 
 nature the worse off it is. Of course, if the wise 
 philosophy is not simply to use, with energy and 
 prudence, all the natural opportunities which we 
 possess, but to seek " channels favored or created 
 by law," then this view of natural resources is 
 perfectly consistent with that philosophy, for it is 
 
54 PROTECTIONISM. 
 
 simply saying over again that waste is the key of 
 wealth. 
 
 G.) Examination of the Proposal to liaise Wages. 
 
 47. " But," he says again, " we want to raise 
 wages and favor the poor working man/' "Do 
 you mean to say," I reply, " that protective taxes 
 raise wages that that is their regular and constant 
 effect?" "Yes," he replies, "that is just what 
 they do, and that is why we favor them. We 
 are the poor man's friends. You free-traders 
 want to reduce him to the level of the pauper 
 laborers of Europe." " But here, in the evidence 
 offered at the last tariff discussion in Congress, 
 the employers all said that they wanted the taxes 
 to protect them because they had to pay such 
 high wages." " Well, so they do." " Well then, 
 if they get the taxes raised to help them out when 
 they have high wages to pay, how are the taxes 
 going to help them any unless the taxes lower 
 wages ? But you just said that taxes raise wages. 
 Therefore, if the employer gets the taxes raised, 
 he will no sooner get home from Washington 
 than he will find that the very taxes which he has 
 just secured have raised wages. Then he must go 
 
BOOT-MAN, HA T-MAN, AND CLOTH-MAN. 55 
 
 back to Washington to get the taxes raised to off- 
 set that advance, and when he gets home again he 
 will find that he has only raised wages more, and 
 so on forever. You are trying to teach the man 
 to raise himself by his boot straps. Two of your 
 propositions brought together eat each other." 
 
 48. We will, however, pursue the protectionist 
 doctrine of wages a little further. It is totally 4 ^ 
 false that protective taxes raise wages v As I will 
 show further on (91 and following), protective 
 taxes lower wages. Now, however, I am assum- 
 ing the protectionist's own premises and doctrines 
 all the time. He says that his system raises 
 wages. Let u's go to see some of the wages class 
 and get some evidence on this point. We will 
 take three wage-workers, a boot-man, a hat-man, 
 and a cloth-man. First we ask the boot-man, 
 " Do you win any thing by this tariff? " " Yes," 
 he says, "I understand that I do." "How?" 
 " Well, the way they explain it to me is that when 
 any body wants boots he goes to my boss, pays 
 him more on account of the tax, and my boss 
 gives me part of it." " All right ! Then your 
 comrades here, the hat-man and the cloth-man, 
 pay this tax in which you share ? " " Yes, I sup- 
 
56 PROTECTIONISM. 
 
 pose so. I never thought of that before. I sup- 
 posed that rich people paid the taxes, but I suppose 
 that when they buy boots they must do it too/' 
 " And when you want a hat you go and pay the 
 tax on halts, part of which (as you explain the sys- 
 tem) goes to your friend the hat-man ; and when 
 you want cloth you pay the tax which goes to bene- 
 fit your friend the cloth-man ? " "I suppose that 
 it must be so/' We go then to see the hat-man 
 and have the same conversation with him, and we 
 go to see the cloth-man and have the same con- 
 versation with him. Each of them then gets two 
 taxes and pays two taxes. Three men illustrate 
 r the whole case. If we should take a thousand 
 men in a thousand industries we should find that 
 each paid 999 taxes, and each got 999 taxes, if the 
 system worked as it is said to work. What is the 
 upshot of the whole ? Either they all come out 
 even on their taxes paid and received, or some of 
 the wage receivers are winning something out of 
 other wage receivers to the net detriment of the 
 whole class. If each man is creditor for 999 taxes, 
 and each debtor for 999 taxes, and if the system 
 is " universal and equal," we can save trouble by 
 each drawing 999 orders on the creditors to pay 
 
THE THOUSANDTH TAX, 57 
 
 to themselves their own taxes, and we can set up 
 a clearing house to wipe off all the accounts. 
 Then we come down to this as the net result of 
 the system when it is " universal and equal," that 
 each man MS a consumer pays taxes to himself as a 
 prodiiccr\f^\\-^\. is what is to make us all rich. 
 We can/accomplish it just as well and far more 
 easily, when we get up in the morning, by trans- 
 ferring our cash from one pocket to the other. 
 
 49. One point, however, and the most import- 
 ant of all, remains to be noticed. How about the 
 thousandth tax? How is it when the boot-man 
 wants boots, and the hat-man hats, and the cloth- 
 man cloth ? He has to go to the store on the 
 street and buy of his own boss, at the mar- 
 ket -price (tax on) the very things which he made 
 himself in the shop. He then pays the tax to his 
 own employer, and the employer, according to 
 the doctrine, "shares" it with him. Where is 
 the offset to that part which the employer keeps? 
 There is none. The wages-class, even on the pro- 
 tectionist explanation, may give or take from each 
 other, but to their own employers, they give and 
 take not. At election time the boss calls them in 
 and tells them that they must vote for protection 
 
5 8 PROTECTIONISM. 
 
 or he must shut up the shop, and that they ought 
 to vote for protection, because it makes their 
 wages high. If, then, they believe in the system, 
 just as it is taught to them, they must believe 
 that it causes him to pay them big wages, out of 
 which they pay back to him big taxes, out of 
 which he pays them a fraction back again, and 
 that, but for this arrangement, the business could 
 not go on at all.. A little reflection shows that this 
 just brings up the question for a wage-earner : How 
 much can I afford to pay my boss for hiring me?. 
 or, again, which is just the same thing in other 
 words: What is the net reduction of my wages 
 below the market rate under freedom which results 
 from this system ? (see 65). 
 
 So. Let it not be forgotten that this result is 
 reached by accepting protectionism and reasoning 
 forward from its doctrines and according to its 
 principles. In truth, the employes get no share 
 Urn any taxes which the boss gets out of them and 
 Y others (see 91 fg. f or the truth about wages). 
 Of course, when this or any other subject is thor- 
 oughly analyzed, it makes no difference where we 
 begin or what line we follow, we shall always 
 reach the same result if the result is correct. If 
 
SO ME BOD \ ' M US T COMPE TE. 59 
 
 we accept the protectionist's own explanation of 
 the way in which protection raises wages we find 
 that it proves that protection lowers wages. 
 
 II.) Examination of the Proposal to Prevent 
 Competition by Foreign Pauper Labor. 
 
 51. The protectionist says that he does not want 
 the American laborer to compete with the foreign 
 " pauper laborer" (see 99). He assumes that if 
 the foreign laborer is a woolen operative, the only 
 American who may have to compete with him is 
 a woolen operative here. His device for saving 
 our operatives from the assumed competition is 
 to tax the American cotton or wheat grower, on 
 the cloth he wears, to make up and offset to the 
 woolen operative the disadvantage under which he 
 labors. If then, the case were true as the protec- 
 tionist states it, and if his remedy were correct, 
 he would, when he had finished his operation, 
 simply have allowed the American woolen opera- 
 tive to escape, by transferring to the American 
 cotton or wheat grower the evil results of com- 
 petition with " foreign pauper labor/' 
 
60 PROTECTIONISM. 
 
 I.) Examination of the Proposal to raise the 
 Standard of Public Comfort. 
 
 52. But the protectionist reiterates that he 
 wants to make our people well off, and to diffuse 
 general prosperity, and he says that his system 
 does this. He says that the country has pros- 
 pered under protection and on account of it. He 
 brings from the census the figures for increased 
 wealth of the country, and, to speak of no miner 
 errors, draws an inference that we have prospered 
 more than we should have done under free trade, 
 which is what he has to prove, without noticing 
 that the second term of the comparison is absent 
 and unattainable. In the same manner I once 
 heard a man argue from statistics, who showed by 
 the small loss of a city by fire that its fire depart- 
 ment cost too much. I asked him if he had any 
 statistics of the fires which we should have had 
 but for the fire department (see 102). 
 
 53. The people of the United States have in- 
 herited an untouched continent. The now living 
 generation is practicing bonanza farming on prai- 
 rie soil which has never borne a crop. The popu- 
 lation is only 15 to the square mile. The popula- 
 tion of England and Wales is 446 to the square 
 
CHANCES OF PRO SPIRIT Y. 6 1 
 
 mile; that of the British Islands 290; that 
 of Belgium 481; of France 180; of Germany 
 216. Bateman* estimates that in the better part 
 of England or Wales a peasant proprietor would 
 need from ^/^ to 6 acres, and, in the worse part, 
 from 9 to 45 acres on which to support " a healthy 
 family." The soil of England and Wales, equally 
 divided between the families there, would give only 
 7 acres apiece. The land of the United States, 
 equally divided between the families there, would 
 give 215 acres apiece. These old nations give us 
 the other term of the comparison by which we 
 measure our prosperity. They have a dense pop- 
 ulation on a soil which has been used for thou- 
 sands of years ; we have an extremely sparse popu- 
 lation on a virgin soil. We have an excellent cli- 
 mate, mountains full of coal and ore, natural 
 highways on the rivers and lakes, and a coast in- 
 dented with sounds, bays, and some of the best 
 harbors in the world. We have also a population 
 of good national character, especially as regards 
 the economic and industrial virtues. The sciences 
 
 and arts are highly cultivated among us, and 
 
 \ 
 
 * Broderick, English Land and English Landlords, p. 194. 
 
62 PROTECTIONISM. 
 
 our institutions are the best for the development 
 of economic strength. As compared with old 
 nations we are prosperous. Now comes the pro- 
 tectionist statesman and says : " The things which 
 you have enumerated are not the causes of our 
 comparative prosperity. Those things are all vain. 
 Our prosperity is not due to them. I made it 
 with my taxes/* 
 
 54 (a) In the first place the fact is that we sur- 
 pass most in prosperity those nations which are 
 most like us in their tax systems, and those com- 
 pared with whom our prosperity is least remarkable 
 are those which have by free trade offset as much as 
 possible the disadvantage of age and dense popu- 
 lation. Since, then, we find greatest difference in 
 prosperity with least difference in tax, and least 
 difference in prosperity w r ith greatest difference in 
 tax, we can not regard tax as a cause of prosperity, 
 but as an obstacle to prosperity which must have 
 been overcome by some stronger cause. That 
 such is the case lies plainly on the face of the 
 facts. The prosperity which we enjoy is the 
 prosperity which God and nature have given us 
 mums what the legislator has taken from it. 
 
 55 (b) We prospered with slavery just as we 
 
BENEFICENCE OF OUR STATESMEN. 63 
 
 have prospered with protection. The argument 
 that the former was a cause would be just as 
 strong as the argument that the latter is a 
 cause. 
 
 56 (c) The protectionists take to themselves as 
 a credit all the advance in the arts of the last 
 twenty-five years, because they have not entirely 
 offset it and destroyed it. 
 
 57 (d) The protectionists claim that they have 
 increased our wealth. All the wealth that is pro- 
 duced must be produced by labor and capital - 
 applied to land. The people have wrought and 
 produced. The tax gatherer has only subtracted 
 something. Whether he used what he took well 
 or ill, he subtracted. He could not do any thing 
 else. Therefore, whatever wealth we see about 
 us, and whatever wealth appears in the census is 
 what the people have produced, less what the tax 
 gatherer has taken out of it. 
 
 58- (e) If the members of Congress can estab- 
 lish for themselves some ideal of the grade of com- 
 fort which the average American citizen ought to 
 enjoy, and then just get it for him, they have used 
 their power hitherto in a very beggarly manner. 
 For, although the average status of our people is 
 
64 PROTECTIONISM. 
 
 high when compared with that of other people on 
 the globe, nevertheless, when compared with any 
 standard of ideal comfort, it leaves much to be 
 desired. If Congress has the power supposed, 
 they surely ought not to measure the exercise of it 
 by only making us better off than Europeans. 
 
 59 (/) During the late presidential campaign 
 the protectionist orators assured the people that 
 they meant to make everybody well off, that they 
 wished our people to be prosperous, contented, 
 etc., etc. I wish so too. I wish that all my readers 
 may be millionaires. I freely and sincerely confer 
 on them all the bounty of my good wishes. They 
 will not find a cent more in their pockets on that 
 account. The congressmen have no power to bless 
 my readers which I have not, save one ; that is, 
 the power to tax them. 
 
 60 (g) If the congressmen are determined to 
 elevate the comfort of the population by taxing 
 the population, then every new ship load of immi- 
 grants must be regarded as a new body of persons 
 whom we must " elevate " by the taxes we have to 
 pay. It is said that an Irishman affirmed that a 
 dollar in America would not buy more than a 
 shilling in Ireland. He was asked why then he 
 
NO COMFORT IN TAXES. 65 
 
 did not stay in Ireland. He replied that it was 
 because he could not get the shilling there. That 
 is a good story, only it stops just where it ought 
 to begin. The next question is : How does he get 
 the dollar when he comes to America ? The pro- 
 tectionist wants us to suppose that he gets it by 
 grace of the tariff. If so he gets it out of those 
 who were here before he came. But plainly no 
 such thing is true. He gets it by earning it, and 
 he adds two dollars to the wealth of the country 
 while earning it. The only thing the tariff does 
 in regard to it is to lower the purchasing power of; ' 
 the dollar, if it is spent for products of manufac-' 
 ture, to seventy cents. 
 
 61. Here, again, then, we find that protective 
 taxes, if they do just what the protectionist says 
 that they will do, produce the very opposite effects 
 from those which he says they will produce. They 
 lessen wealth, reduce prosperity, diminish average 
 comfort, and lower the standard of living. (See 
 
 30.) 
 
CHAPTER III. 
 PROTECTIONISM EXAMINED ADVERSELY. 
 
 62. I have so far examined protectionism as a 
 philosophy of national wealth, assuming and 
 accepting its own doctrines, and following them 
 out, to see if they will issue as is claimed. We 
 have found that they do not, but that protection- 
 ism, on its own doctrines, issues in the impoverish- 
 ment of the nation and in failure to do any thing 
 which it claims to do. On the contrary, an ex- 
 amination in detail of its means, methods, pur- 
 poses and plans show that it must produce waste 
 and loss, so that if it were true, we should have to 
 believe that waste and loss are means of wealth. 
 Now I tuin about to attack it in face, on an open 
 issue, for if any project which is advocated proves, 
 upon free and fair examination, to be based an 
 errors of fact and doctrine, it becomes a danger 
 and an evil to be exposed and combated, and 
 truth of fact and doctrine must be set against it. 
 
TRADE IS HARMFUL. 67 
 
 I. PROTECTIONISM INCLUDES AND NECESSARILY CARRIES 
 WITH IT HOSTILITY TO TRADE, OR, A T LEAST, SUSPIC- 
 ION A GA INS T TRA DE. 
 
 A.) Rules for knoiving when it is Safe to Trade. 
 
 63. Every protectionist is forced to regard 
 trade as a mischievous or at least doubtful thing. 
 Protectionists have even tried to formulate rules 
 for determining when trade is beneficial and when 
 harmful. 
 
 64. It has been said that we ought to trade only 
 on meridians of longitude, not on parallels of 
 latitude. 
 
 65. It has been affirmed that we can not safely 
 trade unless we have taxes to exactly offset the 
 lower wages of foreign countries. But it is plain 
 that if the case stands so that an American em- 
 ployer says : " I am at a disadvantage compared 
 with my foreign competitor, because he pays less 
 wages than I," then, by the same token, the 
 American laborer will say : " I am at an advan- 
 tage, compared with my foreign comrade, for I get 
 better wages than he." If the law interferes with 
 the state of things so that the employer is enabled 
 to say : " I am now at less disadvantage in com- 
 petition with my foreign rival, because I do not now 
 
68 PROTECTIONISM. 
 
 have to pay as much more wages than he as for- 
 merly ; " then, by the same token, the American 
 laborer must say : " I am not now as much bet- 
 ter off than my foreign comrade as formerly, for I 
 do not now gain as much more than he as I did 
 there is not now as much advantage in emigrating 
 to this country as formerly." Therefore, when- 
 ever the taxes just offset the difference in wages, 
 they just take aivay from the American laborer all 
 his superiority over the foreigner, and take away 
 all reason for caring to come to this country. So 
 much for the laborer. But the employer, if he has 
 arrested immigration, has cut off one source of the 
 supply of labor, tending to raise wages, and is at 
 war with himself again ( 47). 
 
 66. It has been said that two nations can not 
 trade if the rate of interest in the two differs by 
 two per cent. The rate of interest in the Atlantic 
 States and in the Mississippi valley has always 
 differed by two per cent., yet they have traded 
 together under absolute free trade, and the Mis- 
 sissippi valley has had to begin a wilderness and 
 grow up to the highest standard of civilization in 
 spite of that state of things. 
 
 67. It has been said that we ought to trade only 
 
WHO ARE OUR " INFERIORS" ? 69 
 
 with inferior nations. The United States does 
 not trade with any other nation, save when it 
 buys territory. A in the United States trades 
 with B in some foreign country. If I want 
 caoutchouc I want to trade with a savage in the 
 forests of South America. If I want mahogany 
 I want to trade with a man in Honduras. If I 
 want sugar I want to trade with a man in Cuba. 
 If I want tea I want to trade with a man in China. 
 If I want silk or champagne I want to trade with 
 a man in France. If I want a razor I want to 
 trade with a man in England. I want to trade 
 with the man who has the thing which I want of 
 the best quality and at the lowest rate of exchange 
 for my products. What is the definition or test 
 of an " inferior nation/* and what has that got to 
 do with trade any more than the race, language, 
 color, or religion of the man who has the goods? 
 
 68. If trade was an object of suspicion and 
 dread, then indeed we ought to have rules for di$* 
 tinguishing safe and beneficial trade from mischiev.- 
 ous trade, but these attempts to define and dis- 
 criminate only expose the folly of the suspicion, 
 We find that the primitive men, who dwelt in 
 caves in the glacial epoch, carried on trade. The 
 
70 PROTECTIONISM. 
 
 earliest savages made footpaths through the 
 forests by which to traffic and trade, winning 
 thereby 'mutual advantages. They found that 
 they could supply more wants with less effort 
 by trade, which gave them a share in the natural 
 advantages and acquired skill of others. They 
 trained beasts of burden, improved roads, invent- 
 ed wagons and boats, all in order to extend and 
 facilitate trade. They were foolish enough to 
 think that they were gaining by it, and did not 
 know that they needed a protective tariff to keep 
 them from ruining themselves. Or, why does not 
 some protectionist sociologist tell us at what stage 
 of civilization trade ceases to be advantageous and 
 begins to need restraint and regulation ? 
 
 B,) Economic Units not National Units. 
 
 69. The protectionists say that their system 
 advances civilization inside a state and makes it 
 great, but the facts are all against them (see 136 
 fg). It was by trade that civilization was extend- 
 ed over the earth. It was through the contact of 
 trade that the more civilized nations transmitted 
 to others the alphabet, weights and measures, 
 knowledge of astronomy, divisions of time, tools 
 
IT IS BLESSED TO GIVE AND TAKE. 71 
 
 and weapons, coined money, systems of numera- 
 tion, treatment of metals, skins, and wool, and all 
 the other achievements of knowledge and inven- 
 tion which constitute the bases of our civilization. 
 On the other hand, the nations which shut them- 
 selves up and developed an independent and self- 
 contained civilization ( China and Japan) present 
 us the types of arrested civilization and stereo- 
 typed social status. It is the penalty of isolation 
 and of withdrawal from the giving and taking 
 which properly bind the whole human race 
 together, that even such intelligent and highly 
 endowed people as the Chinese should find their 
 high activity arrested at narrow limitations on 
 every side. They invent coin, but never get 
 beyond a cast copper coin. They invent gun- 
 powder but can not make a gun. They invent 
 movable types, but only the most rudimentary, 
 book. They discover the mariner's compass, but 
 never pass the infancy of ship-building. 
 
 70. The fact is, then, that trade has been the hand- 
 maid of civilization. It has traversed national 
 boundaries, and has gradually, with improvement 
 in the arts of transportation, drawn the human 
 race into closer relations and more harmonious 
 
72 PROTECTIONISM. 
 
 interests. The contact of trade slowly saps old 
 national prejudice and religious or race hatreds. 
 The jealousies which were perpetuated by 
 distance and ignorance can not stand before con- 
 tact and knowledge. To stop trade is to arrest 
 this beneficent work, to separate mankind into 
 sections and factions, and to favor discord, jeal- 
 ousy, and war. 
 
 71. Such is the action of protectionism. The pro- 
 tectionists make much of their pretended "nation- 
 alism," and they try to reason out some kind of 
 relationship between the scope of economic forces 
 and the boundaries of existing nations. The 
 argumentation is fatally broken at its first step. 
 They do not show what they might show, viz., 
 that the scope of economic forces on any given 
 stage of the arts, does form economic units. An 
 English county was such a unit a century ago. 
 I doubt if any thing less than the whole earth 
 could be considered so to-day, when the wool of 
 Australia, the hides of South America, the cotton 
 of Alabama, the wheat of Manitoba and the meat 
 of Texas meet the laborers in Manchester and 
 Sheffield, and would meet the laborers in Lowell 
 and Paterson, if the barriers were out of the way. 
 
THE LA TES T POLL Y. 73 
 
 But what the national protectionist would need to 
 show would be that the economic unit coincides 
 with the political unit. He would have to affirm 
 that Maine and Texas are in one economic unit, 
 but that Maine and New Brunswick are not ; or that 
 Massachusetts and Minnesota are in one economic 
 unit, but that Massachusetts and Manitoba are 
 not. Every existing state is a product of historic 
 accidents. Mr. Jefferson set out to buy the city 
 of New Orleans. He awoke one morning to find 
 that he had bought the western half of the Mis- 
 sissippi valley. Since that turned out so the 
 protectionists think that Missouri and Illinois 
 prosper by trading in perfect freedom.* If it had 
 not turned out so, it would have been very mis- 
 chievous for them to trade in perfect freedom. 
 
 * Since the above was in type, I have, for the first time, seen 
 an argument from a protectionist, that a tariff between our States 
 is, or may become, desirable. It is from the Chicago Inter-Ocean, 
 and marks the extreme limit reached, tip to this time, by protec- 
 tionist fanaticism and folly, although it is thoroughly consistent, 
 and fairly lays bare the spirit and essence ot protectionism : 
 
 " In the United States the present ominous and over-shadowing 
 strike in the iron trade, by which from 75.000 to 100,000 men 
 have been thrown out of work, is an incisive example of the ten- 
 dency of this country, also, to a condition of trade which will com- 
 Eel individual states and certain sections of the country to ask for 
 'gislation, in order to protect them against the cheaper labor and 
 superior natural advantage of others " The remedy for the harm 
 done by taxes on our foreign trade is to lay some on our domestic 
 trade. (See 26, 95.) 
 
74 PROTECTIONISM. 
 
 Nova Scotia did not join the revolt of our thirteen 
 colonies. Hence it is thought ruinous to let coal 
 and potatoes come in freely from Nova Scotia, 
 If she had revolted with us, it would have beqn 
 for the benefit of every body in this union to trade 
 with her as freely as we now trade with Maine. 
 We tried to conquer Canada in 1812-13 and failed 
 Consequently the Canadians now put taxes on 
 pur coal and petroleum and wheat, and we put 
 taxes on their lumber, which our coal and petro- 
 leum industries need. We did annex Texas, at 
 the cost of war, in 1845. Consequently we trade 
 with Texas now under absolute freedom, but, if 
 we trade with Mexico, it must be only very care- 
 fully and under stringent limitations. Is this 
 wisdom, or is it all pure folly and wrong headed- 
 ness, by which men who boast of their intelligence 
 throw away their own chances ? * 
 
 72. Trade is a beneficent thing. It does not 
 need any regulation or restraint. There is no 
 
 * Since the above was in type, a treasury order has subjected 
 all goods from Canada to the same taxes as imported goods, 
 although they may be going from Minnesota to England. Nature 
 has made man too well off. The inhabitants of North America 
 will not simply use their chances, but they divide into two artific- 
 ial bodies so as to try to harm each other. Millions are spent to 
 cut an isthmus where nature has left one, and millions more to 
 set up a tax-barrier where nature has made a highway. 
 
TRADE IS BENEFICENT. 75 
 
 point at which it begins to be dangerous. It is 
 mutually beneficent. If it ceases to be so, it 
 ceases entirely, because he who no longer gains by 
 it will no longer carry it on. (See 125.) 
 
 PROTECTIONISM IS AT WAR WITH IMPROVEMENT. 
 
 73. The cities of Japan are built of very com- 
 bustible material, and when a fire begins it is 
 rarely arrested until the city is destroyed. It was 
 suggested that a steam fire-engine would there 
 reach its maximum of utility. One was imported 
 and proved very useful on several occasions. 
 Thereupon the carpenters got up a petition to 
 the government to send the fire-engine away, be- 
 cause it ruined their business. 
 
 74. The instance is grotesque and exaggerated, 
 but it is strictly true to the principle of protec- 
 tionism. The southern counties of England, a 
 century ago, protested against the opening 
 of the great northern turnpike, because that 
 would bring the products of the northern 
 counties to the London market, of which the 
 southern counties had had a monopoly. After 
 the St. Gothard tunnel was opened the people of 
 southern Germany petitioned the Government to 
 lay higher taxes on Italian products to offset the 
 
76 PROTECTIONISM. 
 
 cheapness which the tunnel had produced. In 
 1837 the first two steamers which ever made com- 
 mercial voyages across the Atlantic arrived at the 
 same time. A grand celebration was held m New 
 York. The foolish people rejoiced as if a new 
 blessing had been won. Man had won a new 1 
 triumph over nature. What was the gain of it ? 
 It was that he could satisfy his needs with less" 
 labor than before ; or, in plain language, get things 
 cheaper. But in 1842 a Home Industry Conven- 
 tion was held in New York, at which it was alleged 
 as the prime reason why more taxes were needed, 
 that this steam transportation had made things 
 cheap here.* Taxes were needed to neutralize the 
 improvement. 
 
 A.) Taxes to offset Cheapened Transportation, 
 
 75. For the last twenty-five years, to go no 
 further back, we have multiplied inventions to 
 facilitate transportation. Ocean cables, improved 
 marine engines, and screw steamers, etc., etc., 
 have been only improved means of supplying the 
 wants of people on two continents more abund- 
 antly with the products each of the other. The 
 
 * 62, Niles's Register, 132. 
 
ARTS VERSUS TAXES. 77 
 
 scientific journals and the daily papers boast of 
 every step in this development as a thing to be 
 proud of and rejoice in, but in the mean time 
 the legislators on both sides of the water are. hard 
 at work to neutralize it by taxation. We, in 
 the United States, have multiplied monstrous 
 taxes on all the things which others make and 
 which we want, to prevent them from being 
 brought to us. The statesmen of the European 
 continent are laying taxes on our meat and wheat, 
 lest they be brought to their people. The arts 
 are bringing us together; the taxes are needed to 
 keep us apart. In France, for instance, the agri- 
 culturist complains of American competition not 
 " pauper labor," but gratuitous soil and sunlight. 
 He does not want the French artisan to have the 
 benefit of our prairie soil. The government yields 
 to him and lays a tax on our meat and wheat. 
 This raises the price of bread in Paris, where the 
 reconstruction of the city has collected a large 
 artisan population. The government then finds 
 itself driven to fix the price of bread in Paris to 
 keep it down. But the reconstruction of the city 
 was accomplished by contracting a great debt, 
 which means heavy taxes. These taxes drive the 
 
7 8 PRO TECTIONISM. 
 
 population out into the suburbs. At least one 
 voice has been raised by an owner of city property 
 that a tax ought to be laid on suburban residents to 
 drive them back to the city,* and not let them es- 
 cape the efforts of the city-landlord to throw his 
 taxes on them. Then, again, France has been 
 subsidizing ships, and when the question of re- 
 newing the subsidy came up, it was argued that 
 the ships subsidized at the expense of the French 
 tax-payer had lowered freight on wheat and made 
 wheat cheap ; that is, as somebody justly replied, 
 had wrought the very mischief against which the 
 increased tax had just been demanded on wheat. 
 Therefore the tax-payer had been taxed first to 
 make wheat cheap, and then again to make it 
 dear. 
 
 76. Tax A to favor B. If A complains, tax C 
 /to make it up to A. If C complains, tax B to 
 favor C. If any of them still complain, begin all 
 over again. Tax them as long as any body com- 
 plains, or any body wants any thing. This is the 
 statesmanship of the last quarter of the nineteenth 
 century. 
 ^ 
 
 * Journal des Economistes, March, 1885, pagq 496. 
 
THE MANIA FOR COLONIES. 79 
 
 77. Bismarck, too, is going into the business. 
 He has to rule a people who live on a poor soil, 
 and have to bear a crushing military system. The 
 consequence is that the population is declining. 
 Emigration exceeds the natural increase. Bis- 
 marck's cure for it is to lay protective taxes against 
 American pork and wheat and rye. This will 
 protect the German agriculturist. If it lowers 
 still more the comfort of the buyers of food, and 
 drives more of them out of the country, then he 
 will go and buy or fight for colonies at the expense 
 of the German agriculturists whom he has just 
 " protected/' although the surplus population of 
 Germany has been taking itself away for thirty 
 years without asking help or giving trouble. 
 What can Germany gain by diverting her emi- 
 grants to her own colony unless she means to 
 bring the able-bodied men back to fight her 
 battles ? If she means that, the emigrants will 
 not go to her colony. 
 
 78. France is also reviving the old colonial 
 policy with discriminating favors and compen- 
 satory restraints. She already owns a possession 
 in Algeria, which is the best example of a colony 
 for the sake of a colony. It has been asserted in 
 
8o PRO TECTIONISM* 
 
 the French Chambers that each French family 
 now in Algeria has cost the Government (i.e., the 
 French taxpayer) 25,000 francs.* The longing 
 of these countries for " colonies " is like the longing 
 of a negro dandy for a cane or a tall hat so as to 
 be like the white gentlemen. 
 
 .B.) Sugar Bounties. 
 
 79. The worst case of all, however, is sugar. 
 The protectionists long boasted of beet-root sugar 
 as a triumph of their system. It is now an in- 
 dustry in which an immense amount of capital is 
 invested on the Continent, but cheap transporta- 
 tion for cane sugar, and improvements in the 
 treatment of the latter, are constantly threatening 
 it. Mention is made in Bradstreefs for June 28, 
 1885, of a very important improvement in the 
 treatment of cane which has just been invented 
 at Berlin. Germany has an excise tax on beet- 
 root sugar, but allows a drawback on it when 
 exported which is greater than the tax. This 
 acts as a bounty paid by the German tax-payer on 
 the exportation. Consequently, beet-root sugar 
 
 * Paris correspondent of the New York Evening Post, 
 February 9, 1884. 
 
THE IND US TR Y VERSUS THE SUGAR. 81 
 
 has appeared even in our market. The chief 
 market for it, however, is England. The conse- 
 quence is that the sugar which is nine cents a pound 
 in Germany, and seven cents a pound here, is 
 five cents a pound in England, and that the annual 
 consumption of sugar per head in the three coun- 
 tries* is as follows : England, 67^ pounds ; United 
 States, 51 pounds; Germany, 12 pounds. I some- 
 times find it difficult to make people understand 
 the difference between wanting an " industry " 
 and wanting goods, but this case ought to make 
 that distinction clear. Obviously the Germans have 
 tJie industry and the Englishmen have the sugar. 
 
 So. No sooner, however, does Germany get her 
 export bounty in good working order than the 
 Austrian sugar refiners besiege their government 
 to know whether Germany is to have the 
 monopoly of giving sugar to the Englishmen. f 
 They get a bounty and compete for that privilege. 
 Then the French refiners say that they can not 
 
 * Economist^ Commercial Review, 1884, p. 15. 
 
 f The Vienna correspondent of the Economist writes, June 15, 
 1885, ' ' The representatives of the sugar trade addressed a petition 
 to the Finance Minister, asking, above all things, that the pre- 
 mium on export should be retained, without which, they say, they 
 can not continue to exist, and which is granted in all countries 
 where beet root sugar is manufactured." 
 
82 PROTECTIONISM. 
 
 compete, and must be enabled to compete in 
 giving sugar to the Englishmen. I believe that 
 their case is under favorable consideration. 
 
 80^. I have found it harder (as is usually the 
 case) to get recorded information about the trade 
 and industry of our own country than about those 
 of foreign nations. However, we too, although 
 we do not raise beet-sugar, have our share in this 
 bounty folly, as may be seen by the following 
 statement, which comes to hand just in time to 
 serve my purpose.* " The export of refined 
 sugar [from the United States] is entirely con- 
 fined to hard sugars, or, to be more explicit, loaf, 
 crushed and granulated. This is because the 
 drawback upon this class of sugar is so large that, 
 refiners are enabled to sell them at less than cost. 
 The highest collectable duty upon sugar testing 
 as high as 99 is but 2.36, but the drawback upon 
 granulated testing the same, and in the case of 
 crushed and loaf less, is 2.82 less I per cent. This 
 is exactly 43c. per one hundred pounds more than 
 the government receives in duty. But it rarely 
 happens that raw sugar is imported testing 99, 
 
 * Brads tree? s, July 25, 1885. 
 
WHA T WE GIVE. 83 
 
 and never for refining purposes. The following 
 table gives the rates of duty upon the average 
 grades used in refining : 
 
 Degrees. Duly. 
 
 Fair refining testing 89 1.96 
 
 Fair refining testing go 2.00 
 
 Centrifugal testing 96 2 28 
 
 Beet sugar testing 88 1 . 92 
 
 It will be clearly seen from the above figures that 
 with a net drawback upon hard sugar of 2.79 our 
 refiners are able to sell to foreigners, through the 
 assistance of our treasury, sugar at less than cost. 
 Taking for instance the net price of centrifugal 
 testing only 97 and the net price less drawback 
 of granulated : 
 
 Certrifugal raw sugar testing 97 6.00 
 
 Less duty 2.28 
 
 Net 3 . 72 
 
 Granulated refined testing 99 6 37^ 
 
 Less drawback 2.71 
 
 Net 3-66^2 
 
 Nothing could demonstrate the absurdity of the 
 present rate of drawback more clearly than the 
 above. A refiner pays 6^c. per hundred more 
 for raw sugar testing 2 less saccharine than he 
 sells refined for. Not, however, to the American 
 
84 PROTECTIONISM. 
 
 consumers, but to foreigners. After paying the 
 expenses necessary to refining by the assistance 
 of a drawback, which clearly amounts to a sub- 
 sidy of about 5oc. a hundred pounds, our large 
 sugar monopolists are assisted by the government 
 to increase the cost of sugar to American con- 
 sumers. One firm controls almost the entire 
 trade of the east ; at all events it is safe to say 
 that the trade of the entire country is controlled 
 by three firms, and the treasury assists this 
 monopoly in sustaining prices against the interest 
 of the country at large. Up to date the exports 
 of refined sugar have amounted to 83,340 tons, 
 which taken at 5oc. a hundred has cost the treas- 
 ury over $830,000. All this may not have gone 
 into the pockets of the refiners, as the shipowners 
 have obtained a share, but the fact remains that 
 the treasury is the loser by this amount. Besides 
 this bounty presses hard upon the consumers. 
 They not only have to pay the tax, but during 
 the late rise they were compelled to pay more for 
 their sugar than they otherwise would have done 
 had not the export demand caused by selling 
 sugar to foreigners at less than cost, the treasury 
 paying the difference, increased prices. While an 
 
A REAL TARIFF COMMISSION. 85 
 
 American consumer is charged 6j^c. for granu- 
 lated, foreign buyers, through the liberality of 
 our government, can buy it under 3^c. Cer- 
 tainly it is time that the Secretary of the Treas- 
 ury asked the sugar commission to commence a 
 comprehensive and impartial inquiry." 
 
 81. Of course the story would not be complete 
 if the English refiners did not besiege their 
 government for a tax to keep out this maleficent 
 gift of foreign tax-payers. This, say they, is 
 not free trade. This is protection turned the 
 other way around. We might hold our own 
 on an equal footing, but we can not contend 
 against a subsidized industry. A superficial 
 thinker might say that this protest was conclusive. 
 The English government set on foot an inves- 
 tigation, not of the sugar refining, but of 
 those other interests which were in danger of 
 being forgotten. There was a tariff investigation 
 which was worth something and was worthy of an 
 enlightened government. It was found /that the 
 consumers of sugar had gained more than all the 
 wages paid in sugar refining. But, on the side of 
 the producers, it was found that 6,000 persons are 
 employed and 45,000 tons of sugar are used 
 
86 PROTECTIOAflSM. 
 
 annually in the neighborhood of London in manu- 
 facturing jam and confectionery. In Scotland 
 there are eighty establishments, employing over 
 4,000 people and using 35,000 tons of sugar per 
 annum in similar industries. In the whole United 
 Kingdom, in those industries, 100,000 tons of sugar 
 are used and 12,000 people are employed, three 
 times as many as in sugar refining. Within twenty 
 years the confectionery trade of Scotland has 
 quadrupled and the preserving trade jam and 
 marmalade has practically been originated. In 
 addition, refined sugar is a raw material in biscuit 
 making and the manufacture of mineral waters, 
 and 50,000 tons are used in brewing and distilling. 
 Hence the Economist argues (and this view seems 
 to have controlled the (decision) : " It may be 
 that the gain which we at present realize from the 
 bounties may not be enduring, as it is impossible 
 to believe that foreign nations will go on taxing 
 themselves to the extent of several millions a year 
 in order to supply us and others with sugar at less 
 than its fair price, but that is no reason for refus- 
 ing to avail ourselves of their liberality so long as 
 it does last/' * (See 83, note.) 
 
 * Economist, 1884, p. 1052. 
 
THE LOST INDUSTRIES. 87 
 
 82. One point in this case ought not to be lort 
 sight of. If the English government had yielded 
 to the sugar refiners without looking further, all 
 these little industries which are mentioned, and 
 which in their aggregate are so important, would 
 have been crushed out. Ten years later they 
 would have been forgotten. It is from such an 
 example that one must learn to form a judgment 
 as to the effect of our tariff in crushing out indus- 
 tries which are now lost and gone, and can not 
 even be recalled for purposes of controversy, but 
 which would spring into existence again if the 
 repeal of the taxes should give them a chance. 
 
 83. On our sideothe water efforts have been 
 made to get us into the sugar struggle by the pro- 
 posed commercial treaties with Spain and England, 
 which would in effect have extended our pro- 
 tective tariff around Cuban and English West 
 Indian sugar.* The sugar consumers of the 
 United States were to pay to the Cuban planters 
 the twenty-five million dollars revenue which they 
 
 * A friend has sent me a report (Barbados Agricultural 
 Reporter, April 24, 1885), of an indignation meeting at Bridge- 
 town to protest, because the English Government refused to ratify 
 the commercial treaty with the United States. r l he islanders feel 
 the competition of the '* bounty-fed " su'gar in the English mar- 
 ket ; a new complication, a new mischief. 
 
88 PROTECTIONISM. 
 
 now pay to the treasury on Cuban sugar, on con- 
 dition that the Cubans should bring back part of 
 it and spend it among our manufacturers. It 
 was a new extension of the plan of taxing some 
 of us for the benefit of others of us. Let it be 
 noticed, too, that when it suited their purpose, 
 the protectionists were ready to sacrifice the 
 sugar industry of Louisiana without the least 
 concern. We have been trying for twenty-five 
 years to secure the home market and keep every 
 body else out of it. As soon as we get it firmly 
 shut, so that nobody else can get in, we find that it 
 is a question of life and death zvitk us to get out 
 ourselves. The next device is to tax Americans 
 in order to go and buy a piece of the foreign 
 market. At the last session of Congress Senator 
 Cameron proposed to allow a drawback on raw 
 materials used in exported products. On that 
 plan the American manufacturer would have two 
 costs of production, one when he was working for 
 the home market, and another much lower one 
 when working for the foreign market. As it is 
 now, the exports of manufactured products, of 
 which so much boasting is heard, are for the most 
 part articles sold abroad lower than here so as not 
 
INTERNATIONAL GIFT-MAKING. 89 
 
 to break down the home monopoly market. The 
 proposed plan would raise that to a system, and 
 we should be giving more presents to foreigners, 
 
 84. To return to sugar, our treaty with the 
 Sandwich Islands has produced anomalous and 
 mischievous results on the Pacific coast. In the 
 southern Pacific New Zealand is just going into 
 the plan of bounties and protection on sugar.* 
 It would not, therefore, be very bold to predict a 
 world-wide catastrophe in the sugar industry 
 within five years. 
 
 85. Now what is it all for? What is it all 
 about? Napoleon Bonaparte began it in a despotic 
 whim, when he determined to force the produc- 
 tion of beet root sugar to show that he did not 
 care for the supremacy of England at sea which 
 cut him off from the sugar islands. In order not 
 to lose the capital engaged in the industry, pro- 
 tection was continued. But this led to put- 
 ting more capital into it and further need of pro- 
 tection. The problem has tormented financiers 
 for seventy-five years. There are two natural 
 products of which the cane is far richer in sugar. 
 But the processes of the beet-sugar industry have 
 
 * Economist, Commercial Supplement, Feb. 14, 1885, p. 7. 
 
po PROTECTIONISM. 
 
 been improved, until recently, far more rapidly 
 than those of the cane industry. Then the refin- 
 ing is a separate interest. If then a country has 
 cane-sugar colonies which it wants to protect 
 against other colonies, and a beet-sugar industry 
 which it wants to protect against neighbors who 
 produce beet-sugar, and refiners to be protected 
 against foreign refiners, and if the relations of its 
 own colonial cane-sugar producers to its own 
 domestic beet-sugar producers must be kept 
 satisfactorily adjusted, in spite of changes in pro- 
 cesses, transportation and taxation, and if it 
 wants to get a revenue from sugar, and to use the 
 colonial trade to develop its shipping, and if it has 
 two or three commercial treaties in which sugar is 
 an important item, the statesman of that country 
 has a task like that of a juggler riding several 
 horses and keeping several balls in motion. Sugar 
 is the commodity on which the effects of a world- 
 embracing commerce, produced by modern inven- 
 tions, are most apparent, and it is the commodity 
 through which all the old protectionist anti-com- 
 mercial doctrines will be brought to the most 
 decisive test. 
 
FIGHTING OUR IV A Y OUT, 91 
 
 C.) Forced Foreign Relations to Regulate Im- 
 provement 'which can no Longer be l)efeate<l. 
 
 86. If we turn back once more to our own case 
 we note the rise in 1883-4 of the policy of com- 
 mercial treaties, and of a " vigorous foreign 
 policy." For years a " national policy " for us 
 has meant " securing the home market." The 
 perfection of this policy has led to isolation and 
 ostentatious withdrawal from cosmopolitan inter- 
 ests. I may say that I do not write out 
 of any sympathy with vague humanitarianism 
 or cosmopolitan sentiments. It seems to me that 
 local groupings have great natural strength and 
 obvious utility so long as they are subdivisions 
 of a higher organization of the human race, or so 
 long as they are formed freely and their relations 
 to each other are developed naturally. But now 
 suddenly rises a clap-trap demand for a " national 
 policy," which means that we shall force our way 
 out of our tax-created isolation by diplomacy or 
 war. The effort, however, is to be restrained care- 
 fully and arbitrarily to the western hemisphere, 
 and we have anxiously disavowed any part or lot 
 in the regulation of the Congo, although we 
 shall certainly some day desire to take our 
 
9* PROTECTIONISM. 
 
 share in the trade of that district. Our statesmen, 
 however, if they are going to let us have any 
 foreign trade, can not bear to let us go and take it 
 where we -shall make most by it. They must 
 draw a priori lines for it. They have taxed us in 
 order to shut us up at home. This has killed the 
 carrying trade, fox, if we decided not to trade, 
 what could the shippers find to do ? Next ship- 
 
 t . building perished, for if there was no carrying 
 trade why build ships, especially when the taxes to 
 protect manufactures were crushing ships and com- 
 merce ? ( 101). Next the navy declined, for with 
 
 ,- no commerce to protect at sea, we need no navy. 
 Next we lost the interest which we took thirty 
 years ago in a canal across the isthmus, because 
 we have now, under the no-trade policy, no use 
 for it. Next diplomacy became a sinecure, for 
 we have no foreign relations. 
 
 87. Now comes the " national policy," not 
 because it is needed, but as an artificial and 
 inflated piece of political bombast. We are to 
 galvanize our diplomacy by contracting commer- 
 cial treaties, and meddling in foreign quarrels. 
 No doubt this will speedily make a navy neces- 
 sary. In fact our proposed " American policy " 
 
THE CAST-OFF JOHN BULL POLICY. $$ 
 
 is only an old, cast-off, eighteenth century, John 
 Bull policy, which has forced England to keep up 
 a big army, a big navy, heavy debt, heavy taxes, 
 and a constant succession of little wars. Hence 
 we shall be taxed some more to pay for a navy. 
 Then it is proposed to tax us some more to pay 
 for canals through which the navy can go. Then 
 we are to be taxed some more to subsidize mer- 
 chant ships to go through the canal. Then we 
 are to be taxed some more to subsidize voy- 
 ages, i e., the carrying trade. Then we are to be 
 taxed some more to provide the ships with 
 cargoes ( 83). 
 
 88. All this time, the whole West Indian, Mex- 
 ican, and Central and South American trade is 
 ours if we will only stand out of the way and let 
 it come. It is ours by all geographical and com- 
 mercial advantage, and would have been ours 
 since 1825 if we had but taken down the barriers. 
 Instead of that we propose to tax ourselves some 
 more to lift it over the barriers. Take the taxes 
 off goods, let exchange go on, and the carrying 
 trade comes as a consequence. If we have goods 
 to carry, we shall build or buy ships in which to 
 cany them. If we have merchant ships, we shall 
 
94 PROTECTIONISM. 
 
 need and shall keep up a suitable navy. If we 
 need canals, we shall build them, as, in fact, pri- 
 vate capital is now building one and taking the 
 risk of it. It we need diplomacy we shall learn 
 and practice diplomacy of the democratic, peace- 
 ful, and commercial type. 
 
 89. Thus, under the philosophy of protection- 
 ism, the very same thing, if it comes to us freely 
 by the extension of commerce and| the march of 
 improvement, is regarded with terror, while, if we 
 can first bar it out, and then only let a little of it 
 in at great cost and pains, it is a thing worth 
 fighting for. Such is the fallacy of all commer- 
 cial treaties. The crucial criticism on all the 
 debates at Washington in 1884-5 was : Have these 
 debaters made up their minds to any standard by 
 which to measure what you get and what you give 
 under a commercial treaty? It was plain that 
 they had not. A generation of protectionism has 
 taken away the knowledge of what trade is 
 ( 125, 139), and whence its benefits arise, and 
 has created a suspicion of trade ( 63, fg). Hence 
 when our public men came to compare what we 
 should get and what we should give, they set 
 about measuring this by things which were 
 
WHETHER IT IS A GOOD BARGAIN. 95 
 
 entirely foreign to it. Scarcely two of them 
 
 i 
 agreed as to the standards by which to measure 
 
 it. Some thought that it was the number of peo- 
 ple in one country compared with the number in 
 the other. Others thought that it w r as the 
 amount sold to as compared with the amount 
 bought from the country in question. Others 
 thought that it was the amount of revenue to be 
 sacrificed by us as compared with the amount 
 which would be sacrificed by the other party. If 
 any one will try to establish a standard by which 
 to measure the gain by such a treaty to one 
 party or the other, he will be led to see the fal- 
 lacy of the whole procedure. The greatest gain 
 to both would be if the trade were perfectly free. 
 If it is obstructed more or less, that is a harm to 
 be corrected as far and as soon as possible. If 
 then either party lowers its own taxes, that is a 
 gain and a movement toward the desirable state 
 of things. No state needs any body's permission 
 to lower its own taxes, and entanglements which 
 would inpair its fiscal independence would be a new 
 harm.* 
 
 * Since the above was in type, a report from the " South Amer- 
 ican Commission " has been received and published. This Com- 
 
96 PROTECTIONISM. 
 
 t/ 90. Protectionism, therefore, is at war with im- 
 provement. It is only useful to annul and offset 
 the effects of those very improvements of which 
 we boast. In time, the improvements win power 
 so great that protectionism can not withstand 
 them. Then it turns about and tries to control and 
 regulate them at great expense by diplomacy or war. 
 
 mission submitted certain propositions to the President of Chili on 
 behalf of the United States. The report says : 
 
 11 The second proposition involved the idea of a reciprocal com- 
 mercial treaty between the two countries under which special pro- 
 ducts of each should be admitted free of duty into the other when 
 carried under the flag of either nation. This did not meet with 
 any greater favor with President Santa Maria, who was not dis- 
 posed to make reciprocity treaties. His people were at liberty to 
 sell where they could get the best prices and buy where goods were 
 the cheapest. In his opinion commerce was not aided by commer- 
 cial treaties, and Chili neither asked from nor gave to other nations 
 especial favors. Trade would regulate itself, and there was no 
 advantage in trying to divert it in one direction or the other. So far 
 as the United States was concerned, there could be very little trade 
 with Chili, owing to the fact that the products of the two countries 
 were almost identical. Chili produced very little that we wanted, 
 and although there were many industrial products of the United 
 States that were used in Chili, the merchants of the latter country 
 must be allowed to buy where they sold and where they could 
 trade to the greatest advantage. With reference to the provision 
 that reduced duties should be allowed only upon goods carried in 
 Chilian or American vessels, he said that Chili did not want any 
 such means to encourage her commerce : her ports were open to all 
 the vessels of the world upon an equality, and none should have 
 especial privileges." (N. Y. Times, July 3, 1885.) 
 
 If this is a fair specimen of the political and economic enlighten- 
 ment which prevails at the other end of the American Continent, 
 it is a great pity that the " Commission " is not a great deal larger. 
 They are like the illiterate missionaries who found themselves un- 
 awares in a theological seminary. We would do well to send our 
 whole Congress out there. 
 
WHAT THE WAGES SYSTEM IS. 97 
 
 The greater and more world-wide these improve- 
 ments are, the more numerous are the efforts in 
 different parts of the world to revive or extend 
 protection. No doubt there is loss and incon- 
 venience in the changes which improvement brings 
 about. A notable case is the loss and inconven- 
 ience of a laborer where a machine is first intro- 
 duced to supplant him. Patient endurance and 
 hope, in the confidence that he will in the end be 
 better off, has long been preached to him. It is 
 true that he will be better off, but why not apply 
 the same doctrine in connection with the other in- 
 conveniences of improvement, where it is equally 
 true? 
 
 3. PROTECTION LOWERS WAGES. 
 
 91. On a pure wages system, that is, where there 
 is a class who have no capital and no land, wages 
 are determined by supply and demand of labor. 
 The demand for labor is measured by the capital 
 in hand to pay for it just as the demand for any 
 thing else is measured by the supply of goods 
 offered in exchange for it. In Cobden's language : 
 " When two men are after one boss, wages are low ; 
 when two bosses are after one man, wages are 
 high." 
 
98 PROTECTIONISM. 
 
 A.) No True Wages Class in the United States. 
 
 92. The United States, however, have never yet 
 been on a pure wages system because there is no 
 class which has no land or can not get any. In 
 fact, the cheapening of transportation which is 
 going on is making the land of this continent, 
 Australia, and Africa, available for the laborers of 
 Europe, and is breaking down the wages system 
 there. This is the real reason for the rise of the 
 proletariat and the expansion of democracy which 
 are generally attributed to metaphysical, senti- 
 mental, or political causes. A man who has no 
 capital and no land can not live from day to day 
 except by getting a share in the capital of others 
 in return for services rendered. In an old society 
 or dense population, such a class comes into exist- 
 ence. It has no reserves; no other chances ; no 
 other resource. In a new country yio such class 
 exists. The land is to be had for going to it. On 
 the stage of agriculture which is there existing 
 very little capital and very little division of labor 
 are necessary. Hence he who has only unskilled 
 manual strength can get at and use the land, and 
 he can get out of it an abundant supply of the 
 
THE LABORER'S CHANCES. 99 
 
 rude primary comforts of existence for himself 
 and his family. If it is made so cheap and easy 
 to get from the old centers of population to the 
 new land that the lowest class of laborers can save 
 enough to pay the passage, then the effect will 
 reach the labor market of the old countries also. 
 Such is now the tact. 
 
 93. The weakness of a true wages class is in the 
 fact that they have no other chance. Obviously, 
 however, a man is well off in this world in propor- 
 tion to the chances which he can command. The ad- 
 vantage of education is that it multiplies a man's 
 chances. Our non-capitalists have another chance 
 on the land, and the chance is near and easy to 
 grasp and use. It is not necessary that all or any 
 number should use it. Every one who uses it 
 leaves more room behind, lessens the supply and 
 competition of laibor, and helps his class as a class. 
 The other chance which the laborer possesses is 
 also a good one, and consequently sets the mini- 
 mum of unskilled wages high. Here we have the 
 reason for high wages in a new country. 
 
 94. The relation of things was distinctly visible 
 in the early colonial days. Winthrop tells how 
 the General Court in Massachusetts Bay tried to 
 
 .UNIVERSITY 
 
100 PROTECTIONISM. 
 
 fix the wages of artisans by law. It is obvious 
 that artisans were in great demand to build 
 houses, and that they would not work at their 
 trades unless the wages would buy as good or bet- 
 ter living than the farmers could get out of the 
 ground, for these artisans could go and take up 
 land and be farmers too. The only effect of the 
 law was that the artisans " went West " to the 
 valley of the Connecticut, and the law became a 
 dead letter. The same equilibration between the 
 gains from the new land and the wages of 
 artisans and laborers has been kept up ever 
 since. 
 
 95. In 1884 an attempt was made to unite the 
 Eastern and Western Iron Associations for com 
 mon effort in behalf of higher wages. The union 
 could not be formed because the Eastern and 
 Western Associations never had had the same rate 
 of wages. The latter being further west, where 
 the supply of labor is smaller, and the land 
 nearer, have obtained higher wages. It may be 
 well to anticipate a little right here in order to 
 point out that this difference in wages has not pre- 
 vented the growth of the industry in the West, 
 and has not made competition in a common 
 
WAGES DO NOT CONTROL. IOI 
 
 market impossible.* The fact is of the first 
 importance to controvert the current assumption 
 of the protectionists. They say that an industry 
 can not be carried on in one place if the wages 
 there are higher than must be paid by somebody 
 in the same industry in another place. Thisprop^- 
 osition has no foundation in fact; at all, , Farm, 
 laborers in Iowa get three times 'tlie ; -wages of 
 farm laborers in England. The produces M J *tfe 
 former pay 5,000 miles transportation, and then 
 drive out the products of the latter. Wages are 
 only one element, and often they are far from 
 being the most important element in the economy 
 of production. The wages which are paid to the j 
 men who make an article have nothing to do ^vith 
 the prile or value of that article. This proposi- 
 tion, I know, has a startling effect on the people 
 who hold to the monkish notions of political 
 economy, but it is only a special case of the theo- 
 rem that " Labor vukick is past has no effect on 
 vldue" which is the true corner-stone of any sound 
 political economy. ( Wages are determined by the 
 supply and demand of labor. ! Value is determined * 
 
 * This is the case for which the Inter-Ocean proposed the 
 remedy described 71 note. 
 
102 PROTECTIONISM. 
 
 by the supply and demand of the commodity. 
 These two things have no connection. Wages 
 are one element in the capitalist's outlay for pro- 
 duction. If the total outlay in one line of produc- 
 tion, when compared with the return obtained in 
 that line, is not as advantageous as the total outlay 
 in another line when compared with the return 
 . available, in the second line, then the capital is 
 v'Vfithd.raWn frem the first line and put into the 
 'second, but the rate of wages in either case or any 
 case is the market rate, determined by the supply 
 and demand of labor, for that is what the employ- 
 ers must pay if they want the men, whether they 
 are making any profits or not. 
 
 96. The facts and economic principles just 
 stated above show plainly why wages are high, 
 and put in strong light the assertion of the pro- 
 tectionists that their device makes wages high 
 (47), that is, higher than they would be other- 
 wise, or higher here than they are in Europe. 
 Wages are not arbitrary. They can not be shifted 
 up and down at any body's whim. They are con. 
 trolled by ultimate causes. If not, then what has 
 made them fall during the last eighteen months, 
 ten to forty per cent., most in the most protected 
 
THE WAGES-RAISER DOES NOT WORK. 103 
 
 industries ( 26) ? Why are they highest in the 
 least protected and unprotected industries, e. g., 
 the building trades? Hod carriers recently 
 struck in New York for $3 for nine hours' work. 
 Where did the tariff touch their case ? Why does 
 not the tariff prevent the fall in wages ? It is all 
 there, and now is the time for it to come into 
 operation, if it can keep wages up. Now it is 
 needed. When wages were high in the market, 
 and it was not needed, it claimed the credit. 
 Now when they fall and it is needed, it is power- 
 less. 
 
 97. Wages are capital. If I promise to pay 
 wages I must find capital somewhere with which to 
 fulfill my contract. If the tariff makes me pay 
 more than I otherwise would, where does the sur- 
 plus come from ? Disregarding money as only 
 an intermediate term, a man's wages are his 
 means of subsistence food, clothing, house rent, 
 fuel, lights, furniture, etc. If the tariff system 
 makes him get more of these for ten hours' work in 
 a shop than he would get without tariff, where does 
 the " more" come from? Nothing but labor and 
 capital can produce food, clothing, etc. Either 
 the tax must make these out of nothing, or it can 
 
104 PROTECTIONISM. 
 
 only get them by taking them from those who 
 have made them, that is by subtracting them 
 from the wages of somebody else. Taking all 
 the wages class into account then the tax can not 
 possibly increase, but is sure by waste and loss to 
 decrease wages. 
 
 U.) How Taxes do act on Wages. 
 \ /Q8. If taxes are to raise wages they must be 
 {/laid not on goods but on men. Let the goods be 
 abundant and the men scarce. Then the average 
 wages will be high, for the supply of labor will be 
 small and the demand great. If we tax goods 
 and not men, the supply of labor will be great, 
 the demand will be limited, and the wages will 
 be low. Here we see why employers of labor 
 want a, tariff. For it is an obvious inconsistency 
 and a most grotesque satire that the same men 
 should tell the workmen at home that the tariff 
 makes wages high, and should go to Washington 
 and tell Congress that they want a tariff because 
 the wages are too high. We have found that the 
 high wages of American laborers have indepen- 
 dent causes and guarantees, outside of legislation. 
 They are provided and maintained by the eco- 
 nomic circumstances of the country. This is 
 
WHA T PA UPER LABOR IS. 105 
 
 against the interest of those who want to hire the 
 laborers. No device can serve their interest 
 unless it lowers wages. From the standpoint of 
 an employer the fortunate circumstances of the 
 laborer become an obstacle to be overcome ( 65). 
 The laborer is too well off. Nothing can do any 
 good which does not make him less well off. 
 The competition which troubles the employer is 
 not the " pauper labor" of Europe. 
 
 99. " Pauper labor " had a meaning in the first 
 half of this century, in England, when the over- 
 seers of the poor turned over the younger portion 
 of the occupants of the poor-houses to the 
 owners of the new cotton factories, under 
 contracts to teach them the trade and pay 
 them a pittance. Of course the arrange- 
 ment had shocking evils connected with it, but it 
 was a transition arrangement. The "pauper 
 laborers' " children, after a generation, became 
 independent laborers ; the system expired of 
 itself, and " pauper laborer " is now a senseless 
 jingle. 
 
 100. The competition which the employers fear 
 is the competition of those industries in America 
 which can pay the high wages and which keep the 
 
V 
 
 to6 PROTECTIONISM. 
 
 wages high because they do pay them. These draw 
 the laborer away. These offer him another 
 chance. If he had no other way of earning more 
 than he is earning, it would be idle for him to 
 demand more. The reason why he demands 
 more and gets it is because he knows where he 
 can get it, if he can not get it where he is. If 
 then he is to be brought down, the only way to 
 do it is to destroy, or lessen the value of, his other 
 chance. This is just what the tariff does. 
 
 101. The taxes which are laid for protection 
 must come out of somebody. As I have shown 
 ( 3 2 > fg-) * ne protected interests give and take 
 from each other, but, if they as a group win any 
 thing, they must win from another group, and 
 that other group must be the industries which 
 are not and can not be protected. In England 
 these were formerly manufactures and they were 
 taxed, under the corn laws, for the benefit of 
 agriculture. In the United States, of course, the 
 case must be complementary and opposite. We 
 tax agriculture and commerce to benefit manufac- 
 tures. Commerce, /. e. the ship building and 
 carrying trade, has been crushed out of existence 
 by the burden ( 86). But the burden thus ] 
 
THE BLESSING OF LESS COMFORT. 107 
 
 thrown on agriculture and commerce lowers the 
 gains of those industries, lessens the attractive- 
 ness of them to the laborer, lessens the value of 
 the laborer's other chance, lessens the competition 
 of other American industries with manufacturing, 
 and so, by taking away from the blessing which 
 God and nature have given to the American 
 laborer, enable the man who wants to hire his ser- 
 vices to get them at a lower rate. The effect of 
 the taxes is just the same as such a percentage 
 taken from the fertility of the soil, the excellence 
 of the climate, the power of tools, or the indus- 
 trious habits of the people. Hence it reduces the 
 average comfort and welfare of the population, and 
 ' with that average comfort it carries down the 
 wages of such persons as work for wages. 
 
 C.) Perils of Statistics, Especially of Wages. 
 
 102. Any student of statistics will be sure to 
 have far less trust in statistics than the uninitiated 
 entertain. The book-keepers have taught us that 
 figures will not lie, but that they will tell very 
 queer stones. Statistics will not lie, but they will 
 play wonderful tricks with a man who does not 
 understand their dialect. The unsophisticated 
 
Io8 PROTECTIONISM. 
 
 reader finds it difficult, when a column of statistics 
 is offered to him, to resist the impression that they 
 must prove something. The fact is that a column 
 of statistics hardly ever proves any thing. It is a 
 popular opinion that any body can use or under- 
 stand statistics. The fact is that a special and 
 high grade of skill is required to appreciate the 
 effect of the collateral circumstances under which 
 the statistics were obtained, to appreciate the 
 limits of their application, and to interpret their 
 significance. The statistics which are used to 
 prove national prosperity are an illustration 
 of this, for they are used as absolute meas- 
 ures when it is plain that they have no use except 
 for a comparison. Sometimes the other term of 
 the comparison is not to be found and it is always 
 ignored ( 52). 
 
 103. A congressional committee in the winter 
 of 1883-4, dealing with the tariff, took up the 
 'census and proceeded to reckon up the wages in 
 steel production by adding all the wages from the 
 iron mine up. Then they took bar iron and 
 added all the wages from the bottom up again, in 
 order to find the importance of the wages element 
 in that, and so on with every stage of iron indus- 
 
FALLA C1ES IN STA TISTICS. 109 
 
 try. They were going to add in the same wages 
 six or eight times over. 
 
 104. The statistics of comparative wages which 
 are published are of no value at all.* It is net 
 known how, or by whom, or from what 
 selected cases, they were collected. It is not 
 known how wide, or how long, or how thorough, 
 was the record from which they were taken. The 
 facts about various classifications of labor in the 
 division of labor, and about the rate at which 
 machinery is run, or about the allowances of one 
 kind and another which vary from mill to mill 
 and town to town are rarely specified at all. 
 Protected employers are eager to tell the wages 
 they pay per day or week, which are of no import- 
 ance. The only statistics which would be of any 
 use for the comparison which is attempted would 
 be such as show the proportion of wages to total 
 cost per unit. Even this comparison would not 
 have the force which is attributed to the other. 
 Hence the statistics offered are worthless or posi- 
 tively misleading. In the nature of the case such 
 statistics are extremely hard to get. If applica- 
 
 * I except those of Mr. Carroll Wright. He has sufficiently 
 stated of how slight value his are. 
 
1 1 PRO TECTIONISM. 
 
 tion is made to the employers, the inquiry con- 
 cerns their private business. They have no inter- 
 est in answering. They can not answer without 
 either spending great labor on their books (if the 
 inquiry covers a period), or surrendering their 
 books to some one else, if they allow him to do 
 the labor. If inquiry is made of the men, it 
 becomes long and tedious and full of uncertainties. 
 Do United States Consuls take the trouble 
 involved in such an inquiry? Have they the 
 training necessary to conduct it successfully? 
 
 105. The fact is generally established and is not 
 disputed that wages are higher here than in 
 Europe. The difference is greatest on the lowest 
 grade of labor manual labor, unskilled labor. 
 The difference is less on higher grades of labor. 
 For what the English call " engineers," men who 
 possess personal dexterity and creative power, the 
 difference is the other way, if we compare the 
 United States and England. The returns of 
 immigration reflect these differences exactly 
 ( 122, note). The great body of the immigrants 
 consists of farmers and laborers. The " skilled 
 laborers " are comparatively a small class, and, if 
 the claims of the individuals to be what they call 
 
DEFINITION- OF SOCIALISM. 1 1 1 
 
 themselves were tested by English or German 
 trade standards, the number would be very small 
 indeed. Engineers emigrate from Germany lo 
 England. Men of that class rarely come to this 
 country, or, if they come, they come under 
 special contracts, or soon return. Each country, 
 spite of all taxes and other devices, gets the class 
 of men for which its industrial condition offers 
 the best chances. The only thing the tariff does 
 in the matter is to take from those who have an 
 advantage here a part of that advantage. 
 
 4 . PRO TECTIONISM IS SO CIA L ISM. 
 
 106. To simply give protectionism a bad name 
 would be to accomplish very little. When I say 
 that protectionism is socialism I mean to classify 
 it and bring it not only under the proper heading 
 but into relation with its true affinities. ( Social- 
 ism is any device or doctrine whose aim is to save 
 individuals from any of the difficulties or hardships 
 of the struggle for existence and the competition of 
 life by the intervention of "the State" Inasmuch 
 as " the State " never is or can be any thing but 
 some other people, socialism is a device for mak- 
 ing some people fight the struggle for existence 
 for others. The devices always have a doctrine 
 
112 PROTECTIONISM. 
 
 behind them which aims to show why this ought 
 to be done. 
 
 107. The protected interests demand that they be 
 saved from the trouble and annoyance of business 
 competition, and that they be assured profits in 
 their undertakings, by " the State," that is, at the 
 expense of their fellow-citizens. If this is not so- 
 cialism, then there is no such thing. If employ- 
 ers may demand that " the State " shall guarantee 
 them profits, why may not the employe's demand 
 that " the State " shall guarantee them wages ? 
 If we are taxed to provide profits, why should we 
 not be taxed for public workshops, for insurance 
 to laborers, or for any other devices which will 
 give wages and save the laborer from the annoy- 
 ances of life and the risks and hardships of the 
 struggle for existence? The " we "who are to 
 pay changes all the time, and the turn of the pro- 
 tected employer to pay will surely come before 
 long. The plan of all living on each other is 
 capable of great expansion. It is, as yet, far 
 from being perfected or carried out completely. 
 The protectionists are only educating those who 
 are as yet on the " paying " side of it, but who 
 will certainly use political power to put them- 
 
EXPANSION OF THE DOGMA. 113 
 
 selves also on the " receiving " side of it. The 
 argument that " the State " must do something 
 for me because my business does not pay, is a 
 very far-reaching argument. If it is good for pig 
 iron and woollens, it is good for all the things to 
 which the socialists apply it. 
 
CHAPTER IV. 
 SUNDRY FALLACIES OF PROTECTIONISM. 
 
 108. I can now dispose rapidly of a series of 
 current fallacies put forward by the protection- 
 ists. They generally are fanciful or far-fetched 
 attempts to show some equivalent which the tax- 
 payer gets for his taxes. 
 
 (A). That infant industries can be nourished up to 
 independence and that they then become productive. 
 
 109. I know of no case where this hope has 
 been realized, although we have been trying the 
 experiment for nearly a century. The weakest in- 
 fants to-day are those whom Alexander Hamilton 
 set out to protect in 1791. As soon as the infants 
 begin to get any strength (if they ever do get any) 
 the protective system forces them to bear the 
 burden of other infants, and so on forever. The 
 system superinduces hydrocephalus on the in- 
 fants, and instead of ever growing to maturity, 
 
INFANT INDUSTRIES. 1 1 5 
 
 the longer they live, the bigger babies they are. 
 It is the system which makes them so, and on its 
 own plan it can never rationally be expected to 
 have any other effect. (See further, under the 
 next fallacy, 1 1 1, fg.) 
 
 no. Mill * makes a statement of a case, as 
 within the bonds of conceivability, where there 
 might be an advantage for a young country to 
 protect an infant industry. He is often quoted 
 without regard to the limitation of his statement, 
 as if he had affirmed the general expediency of pro- 
 tection in new countries and for infant industries. 
 It amounts to a misquotation to quote him with- 
 out regard to the limitations which he specified. 
 The statement which he did make is mathemati- 
 cally demonstrable.! The doctrine so developed is 
 very familiar in private enterprise. A business 
 enterprise may be started which for some years 
 
 * Bk. V., ch. 10, I. 
 
 f It has been developed mathematically by a French mathema- 
 tician (/ournaldes Ecojiemistes, Aug. and Sept., 1873, pp. 285 and 
 464). Let a be the mean annual loss by the tax so long as it lasts 
 in order to start the industry. Let b be the mean annual gain by 
 the industry after it is started. Let x be the years that the tax is 
 to last. The losses and gains must be capitalized at their present 
 worth. The present worth of the losses is the sum of the series, 
 
 a a a 
 
 ' (i+r) ' ' 
 
1 1 6 PRO TECTIONISM. 
 
 will return no profits or will occasion losses, but 
 which is expected later to recoup all these. What 
 are the limits within which such an enterprise can 
 succeed? It must either call for sinking capital 
 only for a short period (like building a railroad or 
 planting an orange grove), or it must promise 
 enormous gains after it is started (like a patented 
 novelty). The higher the rate of interest, as in 
 any new country, the more stringent and narrow 
 these conditions are. Mill said that it was con- 
 ceivable that a case of an industry might occur in 
 which this same calculation might be applied to a 
 protective tax. If, then, any body says that he 
 
 The present worth of the gains forever is the sum of the in- 
 finite series, 
 
 Putting one of these sums equal to the other we get 
 
 lo g :(x+r) 
 In this expression let r be six per cent., give various values to x, 
 
 b 
 and derive the ratio . It then appears that, if the tax lasts Jive 
 
 a 
 
 years, the mean annual gains forever must be one-third of the 
 mean annual losses in order that there may be neither gain nor 
 loss from the experiment. If the tax lasts ten years the gains for- 
 ever must be 80 per cent of the losses for that period ; 25 years, 
 29 per cent ; 100 years, 33,900 per cent. 
 
MILL'S CA SE INADMISSIBLE. 1 1 7 
 
 can offer an industry which meets the conditions, 
 let it be examined to see if it does so. If protec- 
 tion is never applied until such a case is offered, 
 it will never be applied at all. A thing which is 
 mathematically conceivable is one which is not 
 absurd ; but a thing which is practically possible 
 is quite another thing. For myself, I strenuously 
 dissent from Mill's doctrine even as he limits it. 
 In the first place the state can not by taxes work 
 out an industrial enterprise of a character such 
 that it, as any one can see, demands the most in-i 
 tense and careful oversight by persons whose capital 
 is at stake in it, and, in the second place, the 
 state would bear the loss, while it lasted, but pri- 
 vate interests would take the gain after it began. 
 
 (7?.) That protective taxes do not raise prices but 
 lower prices. 
 
 in. To this it is obvious to reply: what 
 good can they then do toward the end pro- 
 posed? Still it is true that, under circumstances, 
 protective taxes do lower prices. The protection- 
 ist takes an infant industry in hand and proposes 
 to rear it by putting on taxes to ward off compe- 
 tition, and by giving it more profits than the 
 
1 1 8 PRO TECTIONISM. 
 
 world's market price would give. This raises the 
 price. But the consumer then raises a complaint. 
 The protectionist turns to him and promises that 
 by and by there will be " overproduction,'* and 
 prices will fall. This arrives in due time, for every 
 protected industry is organized as a more or less 
 limited monopoly, and a monopoly which has 
 overproduced its market, at the price which it 
 wants, is the weakest industry possible ( 24). 
 The consumer now wins, but a wail from the cradle 
 calls the protectionist back to the infant industry 
 which is in convulsions from " overproduction." 
 Some of the infants die. This gives a new chance 
 to the others. They combine for more effective 
 monopoly, put the prices up again by limiting 
 production, and go on until " overproduction " 
 produces a new collapse. This is another reason 
 why infants never win vitality. The net result is 
 that the market is in constant alternations of 
 stringency and laxity, and nothing at all is gained. 
 112. Whenever we talk of prices it should be no-, 
 ticcd that our statements involve money the 
 rate at which goods exchange for money. If then 
 \ we want to raise prices, we must restrict the sup- 
 V ply of goods, so that on the doctrine of money 
 
MAN A GEM EN T OF MONOPOL Y. 119 
 
 also we shall come to the same result as before, I y 
 that protective taxes lessen production and dimin- 
 ish wealth. 
 
 113. The problem of managing any monopoly is 
 to dose the market with just the quantity which it 
 will take at the price which the monopolist wants 
 to get. In a qualified monopoly, that is, one which 
 is shared by a number of persons, the difficulty is 
 to get agreement about the management. They 
 may not have any communication with each other 
 and may compete. If so they will overdose the 
 market and the price will fall. Then they meet, 
 to establish communication ; form an " associa- 
 tion," to get harmonious action, and agree to di- 
 vide the production among them and limit and 
 regulate it, to prevent the former mistake anJ 
 restore prices ( 24). 
 
 (C.) That we should be a purely agricultural 
 nation under free trade. 
 
 114. A purely agricultural nation covering 
 a territory as large as that of the United StaUs 
 is inconceivable. The distribution of indus- 
 tries now inside the United States is a complete 
 proof that no such thing would come to pass, 
 
120 PROTECTIONISM. 
 
 for we have absolute free trade inside, and 
 manufactures are growing up in the agricultural 
 states just as fast as circumstances favor, and 
 just as fast as they can be profitably carried 
 on. Under free trade there would be a subdivis- 
 ion of cotton, woollen, iron and other industries, 
 and we should both export and import different 
 varieties and qualities of these goods. The south- 
 ern states are now manufacturing coarse cottons 
 in competition with New England. The western 
 states manufacture coarse woollens, certain grades 
 of leather and iron goods, etc., in competition with 
 the East. Here we see the exact kind of differen- 
 tiation which would take place under free trade, 
 and we can see the mischief of the tariff, whether 
 on the one hand it strikes a whole category with 
 the same brutal ignorance, or tries, by cunning 
 sub-classification, to head off every effort to save 
 itself which the trade makes.* If, however, it was 
 conceivable that we should become a purely agri- 
 cultural nation, the only legitimate inference would 
 be that our whole population could be better sup- 
 ported in that way than in any other. If there 
 
 * See a fallacy under this head : Cunningham, Growth of 
 English Industry, 410, note. 
 
PROFESSION VERSUS PER FOR MA NCR. 121 
 
 was a greater profit in something else some of 
 them would go into it. 
 
 (D.) That communities which manufacture are 
 more prosperous than those which are agricultural. 
 
 115. This is as true as if it should be said that 
 all tall men are healthy. It would be answered 
 that some are and some are not ; that tallness and 
 health have no connection. Some manufacturing 
 communities are prosperous and some not. The 
 self-contradiction of protectionism appears in one 
 of its boldest forms in this fallacy. We are told 
 that manufactures are a special blessing. The 
 protectionist says that he is going to give us some. 
 Instead of that he makes new demands on us, lays 
 a new burden on us, gives us nothing but more 
 taxes. He promises us an income and increases 
 our expenditure ; promises an asset and gives a 
 liability ; promises a gift and creates a debt ; 
 promises a blessing and gives a burden. The very 
 thing which he boasts of as a great and beneficial 
 advantage gives us nothing, but takes from us 
 more. Prosperity is no more connected with one 
 form of industry than another. If it were so, 
 some of mankind would have, by nature, a per- 
 
122 PROTECTIONISM. 
 
 manently better chance than others, and no one 
 could emigrate to a new, that is agricultural coun- 
 try, without injuring his interests. The world is 
 not made so. 
 
 (.) That it is an object to diversify industry*, 
 and that nations which have various industries are 
 stronger than others which have not various indus- 
 tries. 
 
 116. It is not an object to diversify industry, 
 but to multiply and diversify our satisfactions, 
 comforts, and enjoyments. If we can do this by 
 unifying our industry, in greater measure than by 
 diversifying it, then we should do, and we will do, 
 the former. It is not a question to be decided a 
 priori, but depends upon economic circumstances. 
 If a country has a supremacy in some one indus- 
 try it will have only one. California and Austra- 
 lia had only one industry until the gold mines de- 
 clined in productiveness, that is, until their 
 supreme advantage over other countries was dim- 
 inished : they began to diversify when they 
 began to be less well off. The oil region of Penn- 
 sylvania has a chance of three industries, the old 
 farming industry, coal, and oil. It will have only 
 
WHICH NA TION IS STRONGEST. 1 23 
 
 one industry so long as oil gives chances superior 
 to those enjoyed by any other similar district. 
 When it loses its unique advantage by nature it 
 will diversify. The " strongest " nation is the one 
 which k brings products into the world's market 
 which are of high demand, but which cost it little 
 toil and sacrifice to get ; for it will then have 
 command of all the good things which men can 
 get on earth at little effort to itself. Whether the 
 products which it offers are one or numerous is 
 immaterial. All the tariff has to do with it is that 
 when the American comes into the world's market 
 with wheat, cotton, tobacco, and petroleum, all 
 objects of high demand by mankind and little cost 
 to him, it forces him to forego a part of his due ad- 
 vantage. ( 125, 134.) 
 
 (F.) That manufactures give value to land. 
 
 117. This doctrine issued from the Agricultural 
 Bureau. It has been thought a grand develop- 
 ment of the protectionist argument. It is a simple 
 logical fallacy based on some misconstrued sta- 
 tistics. The value of land depends on supply 
 and demand. The demand for land is population. 
 Hence where the population is dense the value 
 
124 PROTECTIONISM. 
 
 of land is great. Manufactures can be carried 
 on only where there is a supply of labor, that is, 
 where the population is dense. Hence high value 
 of land and manufacturing industry are common 
 results of dense population. The statistician of 
 the Agricultural Bureau connected them with 
 each other as cause and effect, and the New York 
 Tribune said that it : was the grandest contribu- 
 tion to political economy since " the fingers of 
 Horace Greeley stiffened in death ; " which was 
 true. 
 
 118. If manufactures spring up spontaneously 
 out of original strength, and by independent 
 development, of course they " add value to land/* 
 that is to say, the district has new industrial 
 power and every interest in it is benefited ; but, 
 if the manufactures have to be protected, paid for, 
 and supported, they do not do any good as manu- 
 factures, but only as a device for drawing capital 
 from elsewhere, as tribute. In this way, pro- 
 tective taxes do alter the comparative value of 
 land in different districts. This effect can be seen 
 tinder some astonishing phases in Connecticut and 
 other manufacturing states. The farmers are 
 tax?rl to hire some people to go and live in manu. 
 
EFFECT OF D ISP LA CING POP ULA TSOM i 2 g 
 
 factoring villages and carry on manufacturing 
 there. This displacement of population, brought 
 about at the expense of the rural population, 
 diminishes the value of agricultural land and 
 raises that of city land right here within the same 
 state. The hill side population is being impover- 
 ished, and the hill-side farms are being abandoned 
 on account of the tribute levied on them to swell 
 the value of mill sites and adjoining land in the 
 manufacturing towns. ( 120, 137.) 
 
 (G.) That the farmer, if he pays taxes to 
 bring into existence a factory, which would not 
 otherwise exist, will win more than the taxes .by 
 selling farm produce to the artisans. 
 
 1 19. This is an arithmetical fallacy. It proposes 
 to get three pints out of a quart. The farmer is 
 out for the tax and the farm produce and he can 
 not get back more than the tax because, if the fac- 
 tory owes its existence to the protective taxes, it 
 can not make any profit outside of the taxes. 
 The proposition to the farmer is that he shall pay 
 taxes to another man who will bring part of the 
 tax back to buy produce with it. This is to make 
 the farmer rich. The man who owned stock 
 
1 26 PRO TECTIONISM. 
 
 I'm a railroad and who rode on it, paying his fare, 
 'in the hope of swelling his own dividends, was 
 wise compared with a farmer who believes that 
 j protection can be a source of gain to him. 
 
 120. Since, as I have shown ( 101), protective 
 taxes act like a reduction in the fertility of the soil, 
 they lower the "margin of cultivation," and raise 
 rent. They do not, however, raise it in favor of the 
 agricultural land owner, for, by the displacement 
 just described, they take away from him to give 
 to the town land owner. Of course, I do not 
 believe that the protective taxes have really 
 lowered the margin of cultivation in this country, 
 for they have not been able to offset the greater 
 richness of the newest land, and the advance in 
 the arts. What protection costs us comes out of 
 the exuberant bounty of nature to us. Still I 
 know of very few who could not stand it to be a 
 great deal better off than they are, and the New 
 England farmer is the one who has the least 
 chance, and the fewest advantages, with which to 
 endure protection. 
 
GAIN BY S UPPOR TING T PIERS. 127 
 
 (//".) That farmers gain by protection, because 
 it draws so many laborers out of competition with 
 them. 
 
 121. Since the farmers pay the taxes by which 
 this operation is supposed to be produced, a 
 simple question is raised, viz., how much can one 
 afford to pay to buy off competition in his busi- 
 ness? He can not afford to pay any thing unless 
 he has a monopoly which he wants to consolidate. 
 Our farmers are completely open to competition 
 on every side. The immigration of farmers every 
 three or four years exceeds all the workers in all 
 the protected trades. Hence the farmers, if they 
 take the view which is recommended to them, 
 instead of gaining any ground, are face to face 
 with a task which gets bigger and bigger the 
 longer they work at it. If one man should sup- 
 port another in order to get rid of the latter's 
 competition as a producer, that would be the case 
 where the tax payer supports soldiers, idle pen- 
 sioners, paupers, etc. A protected manufacturer, 
 however, by the hypothesis, is not simply sup- 
 ported in idleness, but he is carrying on a busi- 
 ness the losses of which must be paid by those 
 
1 23 PROTECTIONISM. 
 
 who buy off his competition in their own produc- 
 tion. On the other hand, when farmers come to 
 market, they are in free competition with several 
 other sources of supply. Hence, if they did any 
 good to agricultural industry by hiring the arti- 
 sans to go out of competition with them, they 
 would have to share the gain with all their com- 
 petitors the world over while paying all the 
 expense of it themselves. 
 
 122. The movement of men over the earth and 
 the movement of goods over the earth are com- 
 plementary operations. Passports to stop the 
 men and taxes to stop the goods would be equally 
 legitimate. Since it is, once for all, a fact that 
 some parts of the earth have advantages for one 
 thing and other parts for other things, men avail 
 themselves of the local advantages either by 
 moving themselves to the places, or by trading 
 what they produce where they are for what others 
 produce in the other places. The passenger trains 
 and the freight trains are set in motion by the 
 same ultimate economic fact. Our exports are 
 all bulky and require more tonnage than our im- 
 ports. On the westward trip, consequently, bunks 
 are erected and men are brought in space where 
 
WHO IMMIGRA TE. 
 
 129 
 
 cotton, wheat, etc., were taken out. The tariff, 
 by so much as it lessens the import of goods, 
 leaves room which the ship owners are eager to 
 fill with immigrants. To do this they lower the 
 rates. Hence the tariff is a premium on immigra-/ 
 tion. The protectionists have claimed that the 
 tariff does favor immigration. But nine-tenths of 
 the immigrants are laborers, domestic servants, 
 and farmers.* Probably more than one-third 
 of the total number, including women, find 
 their way to the land. As we have seen, the, / 
 tariff also lowers the profits of agriculture,*' 
 which discourages immigration and the move- 
 ment to the land. Therefore, if the farmer 
 believes what the protectionist tells him, he 
 must understand that the taxes he pays bring 
 in more people, and raise the value of land by 
 settling it, and that they also bring more compe- 
 
 * IMMIGRATION IN 1884. 
 
 
 Males. 
 
 Females. 
 
 Total 
 
 Professional occupations. . 
 Skilled occupations. ...... 
 
 . 2,184 
 . 50,905 
 
 100 
 
 4,156 
 
 2,284 
 55,061 
 
 Occupations not stated. . . . 
 No occupation 
 
 . 19.778 
 
 . 75,483 
 
 11,887 
 169,904 
 
 31,665 
 
 245,387 
 
 Miscellaneous occupations 
 
 160,159 
 
 24,036 
 
 184,195 
 
 Total. . 
 
 .3o8,=;oQ 
 
 210,083 
 
 5i8,5q2 
 
 Under miscellaneous were 106,478 laborers and 42,050 farmers. 
 
130 PROTECTIONISM. 
 
 tition, which the farmer must buy off by lowering 
 the profits of his own (the farming) industry. 
 Then, too, so far as the immigrants are artisans, 
 the premium on immigration is a tax paid to 
 . /increase the supply of labor, that is, to lower 
 wages, although the protectionists say that the 
 tariff raises wages. Hence we see that when a 
 tax is laid, in our modern complicated society, 
 instead of being a simple and easy means or 
 method to be employed for a specific purpose, its 
 action and reaction on transportation, land, wages, 
 etc., will produce erratic, contradictory, and con- 
 fused effects, which can not be predicted or an- 
 alyzed thoroughly, and the protectionist, when he 
 pleads three or four arguments for his system, is 
 alleging three or four features of it which, if 
 properly analyzed and brought together, are 
 found to be mutually destructive, and cumulative 
 only as to the mischief they do. (See 29, 101.) 
 
 (/.) That our industries would perish without 
 protection. 
 
 123. Those who say this think only of 
 manufacturing establishments as " industries." 
 They also talk of " our " industries. They mean 
 
WHICH INDUSTRIES ARE OURS. 131 
 
 those we support by the taxes we pay; not 
 those from which we get dividends. No in- 
 dustry will ever be given up except in order 
 to take up a better one, and if, under free ^ 
 trade, any of our industries should perish, it would 
 only be because the removal of restrictions 
 enabled some other industry to offer so much bet- 
 ter rewards that labor and capital would seek the 
 latter. It is plain that, if a man does not know of 
 any better way to earn his living than the one in 
 which he is, he must remain in that, or move to 
 some other place. If any one can suppose that 
 the population of the United States could be 
 forced, by free trade, to move away, he must sup- 
 pose that this country can not support its popula- 
 tion, and that we made a mistake in coming here. 
 This argument is especially full of force if the 
 articles to be produced are coal, iron, wool, cop- 
 per, timber, or any other primary products of the 
 soil. For, if it is said that we can not raise these 
 products of the soil in competition with some 
 other part of the earth's surface, all it proves is 
 that we have come to the wrong spot to seek 
 them. If, however, the soil can support the 
 population under an arrangement by which cer- 
 
132 PROTECTIONISM. 
 
 tain industries support themselves, and those 
 which do not pay besides, then it is plain that the 
 former are really supporting the whole popula- 
 tion, part directly and part indirectly, through a 
 circuitous and wasteful organization. Hence the 
 same strong and independent industries could 
 certainly still better support the whole population, 
 if they supported it directly. - 
 
 124. I have been asked whether we should have 
 had any steel-works in this country, if we had 
 had no protection. I reply that I do not know ; 
 neither does any body else, but it is certain that 
 we should have had a great deal more steel, if we 
 had had no protection. 
 
 125. " But/' it is said, " we should import every 
 thing." Should we import every thing and give 
 nothing? If so, foreigners would make us pres- 
 ents and support us. Should we give equal value 
 in exchange? If so, there would be just as much 
 " industry " and a great deal less " work " in that 
 way of getting things than in making them our- 
 selves. The moment that ceased to be true we 
 should make and not buy. Suppose that a dis- 
 trict, A, has two million inhabitants, one million 
 of whom produce a million bushels of wheat, and 
 
THE GAIN BY TRADE. 133 
 
 one million produce a million hundred weight of 
 iron ; and suppose that a bushel of wheat ex- 
 changes for a hundred weight of iron. Now, by 
 improved transportation and emigration, suppose 
 that a new wheat country, B, is opened, and that 
 its people bring wheat to the first district, offering 
 two bushels for a hundred weight of iron. Plainly 
 they must offer more than one bushel for one hun- 
 dred weight, or it is useless for them to come. 
 Now the people of A, by putting all their labor and 
 capital in iron production, produce two million 
 hundred weight. They keep one million hundred 
 weight, and exchange one million hundred weight 
 of iron for two million bushels of wheat. The 
 destruction of their wheat industry is a sign of a 
 change in industry (unifying and not diversifying) 
 by which they have gained a million bushels of 
 wheat. Such is the gain of all trade. If the gain 
 did not exist trade would not be a feature of civili- 
 zation, 
 
134 PRO TECTIONISM. 
 
 (/.) That it would be wise to call into existence 
 various industries, even at an expense, if we 
 could thus offer employment to all kinds of artisans, 
 etc., who might come to us. 
 
 126. This would be only maintaining pub- 
 lic workshops at the expense of the tax- 
 payers, and would be open to all the objec- 
 tions which are conclusive against public work- 
 shops. The expense would be prodigious, and 
 the return little or nothing. This argument 
 shows less sense of comparative cost and gain 
 than any other which is ever proposed. 
 
 (K.) That we want to be complete in ourselves 
 and sufficient to ourselves, and independent, as a 
 nation, which state of things will be produced by 
 protection. 
 
 127. I will only refer to what I have already 
 said about China and Japan ( 69) as types of 
 what this plan produces. If a number of families 
 from among us should be shipwrecked on an 
 island, their greatest woe would be that they could 
 not trade with the rest of the world. They might 
 live there " self-contained " and "independent," 
 
I SOL A TION AND INDEPENDENCE. 135 
 
 fulfilling the ideal of happiness which this propo 
 sition offers, but they would look about them to 
 see a surfeit of things, which, as they know, their 
 friends at home would like to have, and they 
 would think of all the old comforts which they 
 used to have, and which they could not produce 
 on their island. They might be contented to live 
 on there and make it their home, if they could 
 exchange the former things for the latter. If now 
 a ship should chance that way and discover them 
 and should open communication and trade be- 
 tween them and their old home, a protectionist 
 philosopher would say to them : " You are mak- 
 ing a great mistake. You ought to make every 
 thing for yourselves. The wise thing to do would 
 be to isolate yourselves again by taxes as soon as 
 possible. We sent some sages to the Japanese 
 to induct them into the ways of civilization, who, 
 as a matter of fact, did tell them that the first 
 step in civilization was to adopt a protective tar- 
 iff and shut up again by taxes the very ports 
 which they had just opened, 
 
136 PROTECTIONISM 
 
 (L.) That protective taxes are necessary to pre- 
 vent a foreign monopoly from getting control of our 
 market. 
 
 128. It is said that English manufacturers 
 once combined to lower prices in order to kill out 
 American manufactures, and that they then put 
 up their prices to monopoly rates. If they did 
 this, why did not their other customers send to 
 the United States and buy the goods here in the 
 first instance, and why did not the Americans go 
 and buy the goods of the Englishmen's other 
 customers in the second instance? If the English- 
 men put down their prices for their whole market 
 in the first instance, why did they not incur a 
 great loss ? and, if they raised it for their 
 whole market in the second instance, why did 
 they not yield the entire market to their com- 
 petitors ? The Englishmen are said to be won- 
 derfully shrewd, and are here credited with the 
 most stupid and incredible folly. 
 
 129. The protective system puts us certainly in 
 the hands of a home monopoly for fear of the 
 impossible chance that we may fall into the 
 hands of a foreign monopoly. Before the war 
 
SAL VA TION FROM MONOPOL Y. 137 
 
 we made no first quality thread. We got it at 
 four cents a spool (retail) of an English monopoly. 
 Under the tariff we were saved from this by beir.r; 
 put into the hands of a home monopoly which 
 charged five cents a spool. In the meantime the 
 foreign monopoly lowered thread to three cents a 
 spool (retail) for the Canadians, who were at its 
 mercy. Lest we should have to buy nickel of a 
 foreign monopolist, Congress forced us to buy it 
 of the owner of the only mine in the United 
 States, and added thirty cents a pound to any 
 price the foreigner might ask. 
 
 (M.) That free trade is good in theory but im- 
 possible in practice ; that it ^vould be a good thing if 
 all nations would have it. 
 
 130. That a thing can be true in theory and 
 false in practice is the most utter absurdity 
 that human language can express. For, if a 
 thing is true in practice (protectionism, for in- 
 stance) the theory of its truth can be found, 
 and that theory will be true. But it was admitted 
 that free trade is true in theory. Hence two 
 things which are contradictory would both be 
 true at the same time about the same thing. The 
 
138 PROTECTIONISM. 
 
 fact is, that protectionism is totally impracticable. 
 It does network as it is expected to work ; it 
 does not produce any of the results which were 
 promised from it ; it is never properly and finally 
 established to the satisfaction of its own votaries. 
 They can not let it alone. They always want to 
 " correct inequalities," or revise it one way or an- 
 other. It was they who got up the Tariff Com- 
 mission of 1882. Their system is not capable of 
 construction so as to furnish a normal and regular 
 status for industry. One of them said that the 
 tariff would be all right if it could only be made 
 stable; another said that it ought to be revised 
 every two years. One said that it ought to in- 
 clude every thing ; another said that it would be 
 good " if it was only laid on the right things." 
 
 131. If all nations had free trade, no one of 
 them would have any special gain from it, just as, 
 if all men were honest, honesty would have no 
 commercial value. Some say that a man can not 
 afford to be honest unless every body is honest. 
 The truth is that, if there was one honest man 
 among a lot of cheats, his character and reputa- 
 tion would reach their maximum value. So the 
 nation which has free trade when the others do 
 
FREE TRADE LIKE HONESTY. 139 
 
 not have it, gains the most by comparison with 
 them. It gains while they impoverish themselves. 
 If all had free trade all would be better off, but 
 then no one would profit from it more than others. 
 If this were not true, if the man who first sees the 
 truth and first acts wisely did not get a special 
 premium for it, the whole moral order of the uni- 
 verse would have to be altered, for no reform or 
 improvement could be tried until unanimous con- 
 sent was obtained. If a man or a nation does 
 right, the rewards of doing right are obtained. 
 They are not as great as could be obtained if all 
 did right, but they are greater than those enjoy 
 
 who still do wrong. 
 
 X 
 
 (N.) That trade is WAR, so that free trade methods 
 are unfit for it, and that protective taxes are suited 
 to it. 
 
 132. It is evidently meant by this that 
 trade involves a struggle or contest of com- 
 petition. It might, however, as well be said that 
 practicing law is war, because it is contentious; 
 or that practicing medicine is war, because doctors 
 are jealous rivals of each other. The protection- 
 ists do, however, always seem to think of trade 
 
140 PROTECTIONISM. 
 
 as commercial war. One of them was reported 
 to have said in a speech in the late campaign, that 
 nations would riot fight any more w r ith guns but 
 with taxes. The nations are to boycott each 
 othen One would think that the experience our 
 southerners made of that notion in the civil war, 
 upori which they entered in the faith that " cotton 
 is king," would have sufficed to banish forever 
 that antique piece of imbecility, a commercial 
 war. If trade is war, all the tariff can do about it 
 is to make A fight B's battles, although A has his 
 own battles to fight besides. 
 
 (O.) That protection brings into employment labor 
 and capital which ivould otherwise be idle. 
 
 133. If there is any labor or capital which is 
 idle that fact is a symptom of industrial disease; 
 especially is this true in the United States. If a 
 laborer is idle he is in danger of starving to death. 
 If capital is idle it is producing nothing to its owner, 
 who depends on it, and is suffering loss. There- 
 fore, if labor or capital is idle, some antecedent error 
 or folly must have produced a stoppage in the 
 industrial organization. The cure is, not to lay 
 some more taxes, but to find the error and cor- 
 
GREA TER ECOMOM Y. 141 
 
 feet it. If then things are in their normal and 
 healthy condition, the labor and capital of the 
 country are employed as far as possible under the 
 existing organization. We are constantly trying 
 to improve our exchange and credit systems so as 
 to keep all our capital all the time employed. 
 Such improvements are important and valuable, 
 but to make them costs more thought and skill" 
 ful labor than to invent machines. Hence Con- 
 gress can not do' that work by discharging a volley 
 of taxes at selected articles, and leaving those 
 taxes to find out the proper points to affect, and 
 to exert the proper influence. It takes intelligent 
 and hard working men to do it. The faith t!:: t 
 any thing else can do it is superstition. 
 
 (P.) That a young nation needs protection a nd i. 7, ' 
 suffer some disadvantage in free exdiaugc with en 
 old one. 
 
 134. The younger a nation is the rhcro 
 important trade is to it (cf. 127, fg). The 
 younger a nation is the more it wins by trade, for 
 it offers food and raw materials which are objects 
 of greatest necessity to old nations. The things 
 England buys of us are far more essential to her 
 
14* PROTECTIONISM. 
 
 than what she buys of France or Germany. The 
 strong party in an exchange is not the rich party, 
 or the old party, but the one who is favored by 
 supply and demand, the one who brings to the 
 exchange the thing which is more rare and more 
 eagerly wanted.* If a poor woman went into 
 Stewart's store to buy a yard of calico, she did not 
 have to pay more because Stewart was rich. She 
 paid less because he used his capital to serve her 
 better and at less price than any body else could. 
 England takes 60 per cent, of all our exports. 
 We sell, 1st, wheat and provisions, prime articles 
 of food ; 2d, cotton, the most important raw 
 material now used by mankind ; 3d, tobacco, the 
 most universal luxury and the one for which there 
 is the intensest demand ; 4th, petroleum, the light- 
 ing material in most universal use. These are 
 things which are rare and of high demand. We 
 are, therefore, strong in the market. Protection 
 only robs us of part of our advantage ( 1 16). 
 
 (Q.) That we need protection to get ready for 
 war. 
 
 135. We have no army, or navy, or fortifications 
 
 * See a fallacy under this point : Cunningham, Growth of 
 English Industry, 410 note. 
 
GET AS RICH AS WE CAN. 143 
 
 worth mentioning. We are wasting more by pro- i 
 tective taxes in a year than would be necessary to 
 build a first-class navy and fortify our whole sea- 
 coast. It is said that, in some way, the taxes get 
 us ready for war, and yet in fact we are not ready 
 for war. It is plain that this argument is only a 
 pretense put forward to try to cover the real 
 motives of protection. If we prefer to go without 
 army, navy, and fortifications, as we now do, then 
 the best way to get ready for war, consistently 
 with that policy, is to get as rich as we can. Then 
 we can count on buying any thing in the world 
 which any body else has got, which we need. 
 Protection, then, which lessens our wealth, is only 
 diminishing our power for war. 
 
 (R.) That protectionism produces some great 
 moral advantages. 
 
 136. It is a very suspicious thing when a man 
 who sets out to discuss an economic question 
 shifts over on the "moral " ground. Not because 
 economics and morals have nothing to do with 
 each other. On the contrary, they meet at a 
 common boundary-line, and, when both are 
 sound, straight and consistent lines run from one 
 
144 PROTECTIONISM. 
 
 into the other. Capital is the first requisite of all 
 human effort for goods of any kind, and the in- 
 crease of capital is therefore the expansion of 
 chances that intellectual, moral, and spiritual good 
 may be won. The moral question is : How will 
 the chances be used? If then the economic 
 analysis shows that protective taxes lessen capital,' 
 it follows that those taxes lessen the regular 
 chances for all higher good. 
 
 137. It is argued that hardship disciplines a 
 man and is good for him ; hence, that the free- 
 traders, who want people to do what is easiest, 
 would corrupt them, and that protectionists, by 
 " making work/' bring in salutary discipline for 
 the people. This is the effect upon those who 
 pay the taxes. The counter operation on the 
 beneficiaries of the system I have never seen de- 
 veloped. Bastiat said that the model at which 
 the protectionist was aiming, was Sisyphus, who 
 was condemned in Hades to roll a stone to the top 
 of a hill, from which, as soon as he got it there, it 
 rolled down again to the bottom. Then he rolled 
 it up again, and so on to all eternity. Here then 
 was infinity of effort, zero of result ; the ultimate 
 type to which the protectionist system would 
 
MORAL GAINS. 145 
 
 come. Somebody pitied Sisyphus, to whom he 
 replied : " Thou fool ! I enjoy everlastiiig hope ! " 
 If Sisyphus could extract moral consolation from 
 his case, I am not prepared to deny but that a 
 New England farmer, ground between the upper 
 mill-stone of free competition, in his production, 
 with the Mississippi Valley, and the nether mill- 
 stone of protective taxes on all his consumption, 
 may derive some moral consolation from his case. 
 There are a great many people who are ap- 
 parently ready to inflict salutary chastisement on 
 the American citizen for his welfare and their 
 own advantage. 
 
 138. The protectionist doctrine is that if my 
 earnings are taken from me and given to my neigh- 
 bor, and he spends them on himself ", there will be 
 important moral gains to the community which will 
 be lost if I keep my own earnings, and spend them 
 on myself. The facts of experience are all to the 
 contrary. When a man keeps his own earnings 
 he is frugal, temperate, prudent, and honest. 
 When he gets and lives on another man's earnings, 
 he is extravagant, wasteful, luxurious, idle, and 
 covetous. The effects on the community in either 
 correspond. 
 
146 PROTECTIONISM. 
 
 139. The truth is that protectionism demoralizes 
 and miseducates a people ( 89, 153, 155). It 
 deprives them of individual self-reliance and 
 energy, and teaches them to seek crafty and un- 
 just advantages. It breaks down the skill of great 
 merchants and captains of industry, and develops 
 the skill of lobbyists. It gives faith in monopoly, 
 combinations, jobbery, and restriction, instead of 
 giving faith in energy, free enterprise, public 
 purity and freedom. Illustrations of this occur 
 all the time. Objection has been made to the 
 introduction of machines to stop the smoke 
 nuisance because they would interfere in the com- 
 petition of anthracite and bituminous coal. People 
 have resisted the execution of ordinances against 
 gambling-houses because said houses " make 
 trade " for their neighbors. The theater men 
 recently made an attempt to get regulations 
 adopted against skating rinks, purely on moral 
 grounds. The industries of the country all run 
 to the form of combinations.* Our wisdom is de- 
 veloped, not in the great art of production, but in 
 
 * See an interesting collection of illustrations in an article on 
 *' Lords of Industry " in the North American Review for June, 
 1884. The futile criticisms at the end of the article do not affect 
 the value of the facts collected. 
 
HISTORICAL ECONOMICS. 147 
 
 the tactics of managing a combination, and while 
 we sustain all the causes and all the great prin- 
 ciples of this system of business we denounce 
 " monopoly " and " corporations." 
 
 (S.) That a " worker may gain more by having his 
 industry protected than he will lose by having to 
 pay dearly for what he consumes. A system which 
 raises prices all round like that in the United 
 States at present is oppressive to consumers, but is 
 most disadvantageous to those who consume without 
 producing any thing, and does little, if any, injury 
 to those who produce more than they consume" 
 
 140. This is an English contribution to the 
 subject dropped in passing by a writer on 
 economic history.* It is a note-worthy fact 
 that .the " historical economists " and others 
 who deride political economy as a science 
 do not desist from it, but at once set to 
 work to make very bad political economy of 
 the " abstract " or " deductive " sort. The pas- 
 sage quoted involves three or four fallacies already 
 
 * Cunningham, Growth of English Industry and Commerce, 
 316, note 2. (See also g 114, 134.) 
 
148 PROTECTIONISM. 
 
 noticed, and an assumption of the truth of pro- 
 tectionism as a philosophy. As we have abund- 
 antly established, " workers" gain nothing by pro- 
 tection in their production ( 48.) Also, " a sys- 
 tem which raises prices all around " must either 
 lessen the demand and requirement for money, 
 i. e. y restrict business and the supply of goods 
 ( 112), or it must increase the amount of money. 
 In the former case it could not but injure 
 " workers;" in the latter case we should find 
 ourselves dealing with a greenback fallacy. 
 But passing by that, who are they who con- 
 sume more than they produce ? I can think 
 only of i) princes, pensioners, sinecurists, pro- 
 tected persons, and paupers, who draw support 
 from taxes, and 2) swindlers, confidence men and 
 others who live by their wits on the produce of 
 others. Those under i), if they receive fixed 
 money grants or subsidies, find an advance in 
 price most disadvantageous. So the protected, 
 of course, as consumers of others* products, when 
 they spend what they have received by protection, 
 suffer. Who are they who produce more than 
 they consume ? I can think only of i) tax-payers, 
 2) victims of fraud and of those economic 
 
CONSUMERS AND PRODUCERS. 149 
 
 errors which give one man's earnings to another's 
 use. Rise in price is just as advantageous to this 
 class as it was disadvantageous to the other, on 
 the same hypothesis, viz., if they pay fixed money 
 taxes to the parasites, and can sell their products 
 for more money. Evidently the writer did not 
 understand correctly what his two classes con- 
 sisted of, and he put the protected " workers " in 
 the wrong one. If in industry a person should 
 produce more than he consumes, he could give it 
 away, or it would decay on his hands. If he 
 should consume more than he produced, he would 
 run in debt and become bankrupt* Protection 
 has nothing to do with that. 
 
 That "a duty may at once protect the 
 native manufacturer adequately, and recoup the 
 country for the expense of protecting him'' 
 
 141. This is Professor Sidgwick's doctrine.f 
 It has given great comfort to our protectionists 
 because it is put forward by an Englishman and 
 a Cambridge professor. It is offered under the 
 "art" of political economy. It is a new thing; 
 
 * Mill's Political Economy, bk. I, ch. 5, 5. Cairnes, Leading 
 Principles, chap. I, 5. 
 
 | Political Economy, 491-2. 
 
150 PROTECTIONISM. 
 
 an h priori art. The "may" in it deprives it 
 of the character of a doctrine or dogma such as 
 our less cultivated protectionists give us : " Pro- 
 tective taxes come out of the foreigner," but 
 it is not a maxim of art. It has the air of a 
 very astute contrivance (see 3), and is there- 
 fore very captivating to many people, and it 
 is very difficult to dissect and to expose in a 
 simple and popular way. It has therefore given 
 great trouble and done great mischief. It is, how- 
 ever, a complete error. It is not possible in any 
 way or in any degree to use duties so as to make 
 the foreigner pay for protection. 
 
 142. Professor Sidgwick states the hypothetical 
 case which he sets up to prove by illustration that 
 there "may" be such a case, as follows: "Sup- 
 pose that a five per cent, duty is imposed on 
 foreign silks, and that, in consequence, after a cer- 
 tain interval, half the silks consumed are the pro- 
 duct of native industry, and that the price of the 
 whole has risen 2^ per cent. It is obvious that, 
 under these circumstances, the other half which 
 comes from abroad yields the State five per cent., 
 while the tax levied from the consumers on the 
 whole, is only 2^ per cent. ; so that the nation, 
 
MAKING FOREIGNERS PAY. 151 
 
 in the aggregate, is at this time losing nothing by 
 protection, except the cost of collecting the tax, 
 while a loss equivalent to the whole tax falls on 
 the foreign producer/' 
 
 143. It is necessary, in the first place, to com- 
 plete the hypothesis which is included in this 
 case. Let us assume that the consumption of 
 silk, when all was imported, was 100 yards and 
 that the price was $1.00 per yard. Then the 
 following points are taken for granted although 
 not stated in the case as it is put : i) That the 
 state needs $5 revenue ; 2) that it has determined 
 to get this out of the consumers of silk ; 3) that 
 the advance in price does not diminish the con- 
 sumption ; 4) that the tax forces a reduction of 
 price for the silk in the whole outside market ; 
 5) that the "silk" in question is the same thing 
 after the tax is laid as before. Of these assump- 
 tions, 3, 4, and 5 are totally inadmissible, but, if 
 they be admitted in the first instance, and if the 
 doctrine of the case which is put be deduced, it 
 is this : If the part imported multiplied by the 
 tax is equal to the total consumption multiplied 
 by the advance in price, the consumers can pay 
 the latter in protection, for it is equal to the 
 
152 PROTECTIONISM. 
 
 former, and the former, which is paid to the 
 government by the foreigner, is what the con- 
 sumers of silk must otherwise have paid. 
 
 144. Obviously this deduction is arithmetically 
 incorrect, even on the hypothesis. In the first 
 place, the government has not obtained $5 revenue 
 which it needed, but $2.50 (5 cts. on 50 yards). 
 In the second place, the foreigner sells at $1.02^ 
 (net 97^) the silk which he used to sell for $1.00. 
 He therefore gets back from the consumers 
 2^/2, cts. per yard on 50 yards, or $1.25 out of the 
 $2.50 which he has paid to the government. Also, 
 the domestic silk to compete must be equal to 
 the dollar imported silk which now sells for 
 $1.02^. Hence, the consumers really pay in 
 protection only 2^/2, cts. on 50 yards, i.e. $1.25. 
 This case then is, that the foreigner pays $1.25 
 revenue, and the consumers pay $1.25 revenue 
 and $i. 25 protection. Hence the result is not at 
 all what is asserted, and there is no such opera- 
 tion of the contrivance as was expected. But 
 the government needs $2.50 more revenue, the 
 operation of its tax having been interfered with . 
 by protection. As there is no equivalence or 
 compensation in the case as it already stands, it 
 
REAL EFFECT ON PRODUCTION. 153 
 
 is evident that the effect of any further tax, 
 instead of bringing about equivalence or compen- 
 sation, will be to depart from such a result still 
 further. 
 
 145. It is, however, impossible to admit assump. 
 tions 3, 4, and 5 above, or to deal with any 
 economic problem by any arithmetical process. 
 The result above reached is totally incorrect 
 and only serves to clear the ground for a correct 
 analysis. The producer may have to bear part 
 of a tax, if he is under the tax jurisdiction, or 
 if he has a monopoly. If he has no monopoly, 
 and is not under the tax jurisdiction, and 
 works for the world's market, he can not lower 
 his price in order to assume part of the tax. 
 What he does is that he differentiates his com- , 
 modity. This is the fact in the art of produc- 
 tion which is established by abundant experi- 
 ence. It is the explanation of the constant 
 complaint, under the protective system, of " fraud 7 ' 
 and of the constant demand for sub-classification . 
 in the tariff schedules. The protected product y 
 never is, at least at first, as good in quality as the ' 
 imported article which it aims to supersede. 
 Herice the foreigner, if he desires to retain the 
 
154 PROTECTIONISM. 
 
 protected market, can prepare a special quality 
 for that market. The " silk " after the tax is laid 
 is not the same silk as before. It nets to the 
 foreign producer 97^ cents, and pays him busi- 
 ness profits at that price. Therefore when he 
 sells it at $I.O2J4 he gets back the whole tax 
 from the consumers. The domestic silk sold at 
 $i.O2 T /4 is no better than might have been obtained 
 for 97^ cents. Hence the consumers are paying 
 a tax for protection which is full and equal to 
 the revenue rate. The fact that the price has 
 fallen to $1.02^, and is not $1.05, evidently 
 proves that instead of disproving it, as many 
 believe. 
 
 146. Thus this case falls to pieces. It gains a 
 momentary plausibility from the erroneous as- 
 sumptions which are implicit in it. The foreign 
 producer may suffer a narrowing of his market 
 and a reduction of his aggregate profits, but there 
 is no way to make him tributary (unless he has a 
 monopoly) either to the treasury or the protected 
 interests of the taxing country.* If it was true 
 in general, or in any limited number of cases, that 
 
 * I published a criticism of this case in the London Economist, 
 Dec. i, 1883. 
 
TRIE UTE PAID B Y ENGLAND. 1 5 5 
 
 a country which lays protective taxes can make 
 foreigners pay those taxes, then England, which 
 has had no protective taxes since (say) 1850, and 
 has been surrounded by countries which have had 
 more or less protective taxes, must have been 
 paying tribute to them all this time and must 
 have been steadily impoverished accordingly. 
 
CHAPTER V. 
 SUMMARY AND CONCLUSION. 
 
 147. I have now examined protectionism im- 
 partially on its own grounds, assuming them to 
 be true, and adversely from ground taken against 
 it, and have reviewed a series of the commonest 
 arguments put forward in its favor. If now we 
 return, with all the light we have obtained, to 
 test the assumptions which we found in protec- 
 tionism, that the people would not organize their 
 industry wisely under liberty, and that protective 
 taxes are the correct device for bringing about a 
 better organization, we find that those two as- 
 sumptions are totally false and have no semblance 
 of claim upon our confidence. At every step the 
 dogmas of protectionism, its claims, its apparatus, 
 have proved fallacious, absurd, and impracticable. 
 We can now group together some general criti- 
 cisms of protectionism which our investigation 
 suggests. 
 
WASTE MAKES WEALTH. 157 
 
 148. We have taken the protectionist's own defi- 
 nition of a protective duty, and have found that 
 such a duty, instead of increasing national wealth, 
 must, at every step, and by every incident of 
 its operation, waste labor and capital, lower the 
 efficiency of the national industry, weaken the 
 country in trade, and consequently lower the 
 standard of comfort of the whole population. 
 We have found that protected industries, accord- 
 ing to the statement of the protectionists, do not 
 produce, but consume. If then these industries 
 are the ones which make us rich, consumption is 
 production and destruction produces. The object of a 
 protective duty is "to effect the diversion of a part 
 of the capital and labor of the people out of the 
 channels in which it would run otherwise, into 
 channels favored or created by law" (13). We 
 have seen that the channels into which the labor 
 and capital of the people are to be diverted are 
 offered by the industries which do not pay. Hence 
 protectionism is found to mean that national 
 prosperity is to be produced by forcing labor and 
 capital into employments where the capital can 
 not be reproduced with the same increase which 
 could be won by it elsewhere. If that is so, then 
 
158 PROTECTIONISM. 
 
 capital in those employments will be wasted, and 
 the final outcome of our investigation, which must 
 be made the primary maxim of the art of national 
 prosperity under protectionism, is that Waste 
 makes Wealth. ^ Such is its outcome when regarded 
 as an economic philosophy. 
 
 149. As regards the social and jural relations 
 which are established between citizen and citi- 
 zen, protectionism is proved by a half-dozen 
 independent analyses of it to be simply a device 
 for forcing us to levy tribute on each other. If 
 the law brings a cent to A it must have taken it 
 from B, or else it must have produced it out of 
 nothing, that is, it must be magic. Every soul 
 pays protective taxes. If then any body gets any 
 thing from them, he needs to remember what 
 they cost him, and he should insist on casting up 
 both sides of the account. If any body gets nothing 
 from them, then he pays the taxes and gets no 
 equivalent. 
 
 150. During the anti-corn-law campaign in En- 
 gland, a writer in the Westminster Review illus- 
 trated protectionism by the story of the monkeys 
 in a cage, each of whom received for his dinner a 
 piece of bread. Each monkey dropped his own 
 
MUTUAL GRABBING. 159 
 
 piece of bread and grabbed his neighbor's. The 
 consequence was that soon the floor of the cage 
 was strewn with fragments, and each monkey had 
 to make the best dinner he could from these. It 
 is a good and fair illustration. I saw a story re- 
 cently in a protectionist newspaper about the 
 peasants in the Soudan. Each owns pigeons, and 
 at evening, when the pigeons come home, each 
 tries to entice as many of his neighbor's pigeons 
 as he can into his own pigeon-house. " All of 
 them do the same thing, and therefore each gets 
 caught in his turn. They know this perfectly 
 well, but no Egyptian fellah could resist the 
 temptation of cheating his neighbor/' They ought 
 to tax each other's pigeons all around. Then 
 they would put themselves at once on the level of 
 free and enlightened Americans. The protection- 
 ist assures me that it is for the good of the com- 
 munity and for my good that he should tax me. I 
 reply that, in his language, " these are fine theo- 
 ries," but that whether it is good for the com- 
 munity or not, and whether it is good for me or 
 not, that he should tax me, I can see that it is 
 for his good that he should tax me. Then he 
 says : " Now you are abusive." 
 
160 PROTECTIONISM. 
 
 151. If Protectionism is any thing else than mu- 
 tual tribute, then it is magic. The whole philoso- 
 phy of it comes down to questions like this : How 
 much can I afford to pay a man for hiring me ? 
 How much can I afford to pay a man for trading 
 with me ? How much can I afford to pay a man 
 to cease to compete with me in my production ? 
 How much can I afford to pay a man to go and 
 compete with those who supply me my consump- 
 tion ? It is only an expensive way to get ivhat we 
 could get for nothing if it was worth having ( 89). It 
 is admitted that one man can not lift himself 
 by his boot-straps. Suppose that a thousand men 
 stand in a ring and each takes hold of the other's 
 boot-straps reciprocally and they all lift, can the 
 whole group lift itself as a group ? That is what 
 protection comes to just as soon as we have drawn 
 out into light the other side, the cost side of it. 
 Whatever we win on one side, we must pay for by 
 at least equal cost on another. The losses will all 
 be distributed as net pure injury to the community. 
 The harm of protection lies here. It is not meas- 
 ured by the- tax. It is measured by the total crippling 
 of the national industry. We might as well say that 
 it would be a good thing to put snags in the rivers, 
 
WAR AND PROTECTION. 161 
 
 to fell trees across the roads, to dull all our tools, 
 as to say that unnecessary taxation could work a 
 blessing. Men have argued that to destroy ma- 
 chines was to do a beneficial thing, and I have 
 recently read an article in a Boston paper, 
 quoting a Massachusetts man who thinks that 
 what we need is another war in the United States. 
 Such men may believe that protective taxes 
 work a blessing, but to those who will see the 
 truth, it is plain that, when the whole effect of 
 the protective system is distributed, it benefits 
 nobody. It is a dead weight and loss upon every 
 body, and those who think that they win by it 
 would be far better off in a community where 
 no such system existed, but where each man 
 earned what he could and kept what he earned. 
 152. There is a school of political science in 
 this country in whose deed of foundation it is 
 provided that the professors shall teach how "by 
 suitable tariff legislation, a nation may keep its 
 productive industry alive, cheapen the cost of 
 commodities, and oblige foreigners to sell to it at 
 low prices, while contributing largely toward de- 
 fraying the expenses of the government."* Is not 
 
 * Quoted by Taussig : History of the Existing Tariff, 73. 
 
162 PROTECTIONISM. 
 
 that a fine thing? Those professors ought to 
 likewise provide us a panacea, the philosopher's 
 stone, a formula for squaring the circle, and all 
 the other desiderata of universal happiness. It 
 would be only a trifle for them. The only fear is 
 that they may write the secret which they are to 
 teach in books, and that other nations to whom 
 we are " foreigners," may learn it. Then while 
 Englishmen, Frenchmen, and Germans work for 
 us at low prices and pay our taxes, we shall be 
 forced to work for them at low prices and pay 
 their taxes, and the old somber misery will settle 
 down upon the world again the same as ever. 
 
 153. Some years ago we were told that protec- 
 tion was necessary because we had a big debt to 
 pay. Well, we have paid the debt until we have 
 reduced it from $78.25 per head to $28.41 per 
 head. We, the people, have also raised our 
 credit until the annual debt charge has been 
 reduced from $4.29 per head to 95 cents per head. 
 Now it is necessary to keep up the debt in order 
 to keep up the taxes, and protectionism is now 
 most efficient in forcing wasteful and corrupting 
 expenditures to get rid of revenue, lest a surplus 
 should furnish an argument for reducing taxation. 
 
THE BLAME FOR HARD TIMES. 163 
 
 This is right on the doctrine that waste makes 
 wealth. 
 
 154. They tell us that protection has produced 
 prosperity, and when we ask them to account for 
 hard times in spite of the tariff, they say that 
 hard times are caused by the free traders who will 
 not keep still. Therefore the prosperity produced 
 by protection is so precarious that it can be over- 
 thrown by only talking about free trade. They 
 denounce laissez faire, or "let alone," but the 
 only question is when to let alone, when to keep 
 still. They do not let the tariff alone if they 
 want to revise it to suit them, or want to make it 
 "equitable." When they get it " equitable " they 
 will let it alone, but that insures agitation, and 
 makes sure that they will cause it, for an indefinite 
 time to come. On the other hand the victims of 
 the tariff will not keep still. Their time to " let 
 alone " is when it is repealed. If the tariff did 
 not hurt somebody somewhere it would not 
 do any good to any body any where, and the 
 victims will resist.* Mr. Lincoln used to tell a 
 
 * Illustrations of this are presented without number. Here is 
 the most recent one : " The [silk] masters [of Lyons, France], 
 look to the government for relief by a reduction of the duty on 
 cotton yarn, or the right to import all numbers duty free for ex- 
 
1 64 PROTECTIONISM. 
 
 story about hearing a noise in the next room. 
 He looked in and found Bob and Tad scuf- 
 fling. "What is the matter, boys?" said 
 he. "It is Tad," replied Bob, "who is try- 
 ing to get my knife." " Oh, let him have it, 
 Bob," said Mr. Lincoln, "just to keep him quiet." 
 " No ! " said Bob, " it is my knife and I need it to 
 keep me quiet." Mr. Lincoln used the story to 
 prove that there is no foundation for peace save 
 truth and justice. Now, in this case, the man 
 whose earnings are being taken from him needs 
 them to keep him quiet. Our fathers fought for 
 free soil, and if we are worthy to be their sons we 
 shall fight for free trade, which is the necessary 
 complement of free soil. If a man goes to 
 Kansas to-day and raises corn on " free soil," how 
 does he get the good of it, unless he can 
 exchange that corn for any product of the earth 
 that he chooses on the best terms that the arts 
 and commerce of to-day can give him ? 
 
 port after manufacture. With the present tariffs, they maintained, 
 which is no doubt true, that they cannot compete with the Swiss 
 and German makers. But the Rouen cotton spinners oppose the 
 demand of the Lyons silk manufacturers, and protest that they 
 will be ruined if the latter are allowed to procure their material 
 from abroad. The Lyons weavers assert that they are being 
 ruined because they cannot." (Economist, 1885, p. 815.) The 
 cotton men won in the Chamber of Deputies, July 23, 1885. 
 
LIBERTY AND TAXATION. 165 
 
 155. The history of civil liberty is made up of 
 campaigns against abuses of taxation. Pro- 
 tectionism is the great modern abuse of taxation ; 
 the abuse of taxation which is adapted to a 
 republican form of government. Protectionism is 
 now corrupting our political institutions jitst as 
 slavery used to do, viz., it allies itself with every 
 other abuse which comes up. Most recently it 
 has allied itself with the silver coinage, and it is 
 now responsible, in a great measure, for that 
 calamity. The silver coinage law would have 
 been repealed three years ago, if the silver mining 
 interest had not served notice on the protection- 
 ists that that was their share of protection, 
 and the price of their cooperation. The silver 
 coinage is the chief cause of the " hard 
 times " of the last two or three years. In 
 a well ordered state it is the function of 
 government to repress every selfish interest 
 which arises and endeavors x to encroach upon 
 the rights of others. The state thus main- 
 tains justice. (Under protectionism the govern- 
 ment gives a license to certain interests to go out 
 and encroach on others. It is an iniquity as to the 
 victims of it, a delusion as to its supposed bene- 
 
1 66 PROTECTIONISM. 
 
 ficiaries, and a waste of the public wealth. There 
 is only one reasonable question now to be raised 
 about it, and that is, How can we most easily get 
 rid of it ? 
 
 THE ENDo 
 
INDEX. 
 
 The numbers refer to the paragraphs. 
 
 Abolition, 8 
 
 Act, the tariff, of 1883, 24 
 
 Africa, 92 
 
 Agitation, 154 
 
 Agriculture, 101 
 
 Alabama, 71 
 
 Alchemist, 3, n 
 
 Alchemy, 9 
 
 Algeria, 78 
 
 Alphabet, 69 
 
 American, 18, 32 
 
 American, the Philadelphia, 12 
 
 Art of national prosperity, I, 5, 
 
 7, 148 , 
 
 Art of political economy, 141 
 Art of production, 145 
 Arts, 56, 75, 120 
 Artisans, 75, 94, 1 21 
 Assumptions, 3, 9, 21, 31, 32, 
 
 147 
 
 Astrology, 9 
 Atlantic, 74 
 Atlantic States, 66 
 Army, 145 
 Australia, 71, 92, 116 
 
 Balance of trad, 2 
 Bastiat, 137 
 Bateman, 53 
 Belgium, 53 
 Berlin, 79 
 Biscuit, 8 1 
 Bismarck, 77 
 Bonaparte, Napoleon, 85 
 Book-keepers, 102 
 
 Boot-man, 48, 49 
 Boot-straps, 47, 151 
 Bounties, 2, 79, 80, 81, 84 
 Bradstreefs, 26, 79 
 Bread, 75 
 Brewing, 81 
 Bridgetown, 83 
 Broderick, G. C., 53 
 Burden, 29, 101 
 Bureau of Agriculture, 117 
 
 Cables, ocean, 75 
 
 Cairnes, J. E., 140 
 
 Calamities, 26, 46 
 
 California, 116 
 
 Cameron, Sen., 83 
 
 Cambridge, 141 
 
 Campaign, political, 26, 58, 132 
 
 , anti-corn-law, 150 
 
 against taxation, 155 
 
 Canada, 71, 129 
 
 Canal, 86, 88 
 
 Capital, 10, 12, 13, 21, 35, 38- 
 
 40, 43, 57, 9 1 . 97, 133, 148 
 Cattle, 37 
 Caoutchouc, 67 
 Census, 52, 57, 103 
 Century, eighteenth, I 
 
 , nineteenth, 6 
 
 Character, national, 53 
 Charles II. , 33 
 Chastisement, 137 
 Chili, 89 
 
 China, 67, 69, 127 
 Church, 8, 39, 40 
 
i68 
 
 INDEX. 
 
 Circle, squaring the, 152 
 
 City-landlord, 75 
 
 Civil liberty, 155 
 
 Civilization, 69, 70, 127 
 
 Class, non-capitalist, 2 
 
 Clay, 37 
 
 Climate, 37, 53 
 
 Cloth, 42, 51 
 
 Cloth-man, 48, 49 
 
 Coal, 32, 33, 53, 71, 116, 123 
 
 Coal-owner, 33 
 
 Cobden, 91 
 
 Coercion, 38 
 
 Coin, 69 
 
 Colonies, 77 
 
 Combinaticns, 139 
 
 Comfort, see Standard of 
 
 Commerce, 85, 89, 101 
 
 Commission, tariff, 24, 81, 130 
 
 , South American, 89 
 
 Committee, Congressional, 15, 
 103 
 
 , of Conference, 24 
 
 Compass, 69 
 
 Competition, 100, 107, 121, 
 
 132, 137 
 
 Confectionery, 8 1 
 Congo, 86 
 Congress, 15, 21, 23-26,33,47, 
 
 58, 83, 89, 129, 133 
 Connecticut, 38, 94, 118 
 Consuls, 104 
 Consumer, 14, 32, 33, in, 140, 
 
 145 
 
 Consuming industries, 41 
 Consumption of sugar, 79 
 Contrivance, 3. 141 
 Convention, wool-growers', 32 
 
 , Home Industry, 74 
 
 Copper, 33, 45, 123 
 Corn-laws, lot 
 Cosmopolitanism, 86 
 Cotton, 37, 51, 71, 116, 134 
 
 , yarn, 154 
 
 Cottons, 32 
 
 Credit, 153 
 Cuba, 67, 83 
 
 Cunningham, 114, 134, 140 
 Custom-houses, 12 
 
 Debate, 89 
 
 Debt, 153 
 
 Decisions, tariff, 27 
 
 Definition, 14, 148 
 
 of an industry, 36 
 
 of a protective tax, 
 
 12, 13 
 of free trade, 8, 12 
 
 of protectionism, 
 of theory, 7 
 
 Demand, 91 
 Democracy, 92 
 Demoralization, 139 
 Device, I, 2, 6, 7, 14, 19, 2O, 
 
 83, 96, 106 
 
 Diplomacy, 86, 87, 88, 89 
 Discipline, 137 
 Disease, industrial, 133 
 Distilling, 81 
 Distress, 21 
 
 Diversification, 116, 125 
 Dividend, 119, 123 
 Dogma, I, 5, n, 26 
 Dollars, 38, 60 
 Drawback, 79, 83 
 Duties, import, 12, 24 
 
 Economist, 80, 81, 84, 146, 154 
 Economists, historical, 140 
 Education, 93 
 Emancipation, 8 
 Emery, 33, 45 
 Emigration, 2, 6, 65, 77 
 Employer, 48, 49, 50, 65, 95, 
 
 98, 104 
 
 Employment, 35 
 Energy, conservation of, 1 6 
 Engineers, 105 
 England, 12, 53.67, 71. 74. 79. 
 
 83. 8$, 99, 101, 105, 134, 196 
 
INDEX. 
 
 169 
 
 Europe, 96, 105 
 Excise, 12, 79 
 Expenditure, 30, 153 
 Experiment, 26 
 Exports, 122, 134 
 
 , bounties on, 2 
 
 , taxes on, 6 
 
 Factory, 39, 41 
 
 Earm, Farming, 44, 53, 95 
 
 Favors, special, by treaty, 89 
 
 Fire, 52, 73 
 
 Fire-engine, 73 
 
 Foreigners, 14, 15, 83, 141, 
 
 144, 146, 152 
 Fortifications, 145 
 France, 53, 67, 75, 78, 134 
 Free soil, 8, 154 
 Free trade, 7, 8, 10, 12, 21, 52, 
 
 54, 114, 123, 130, 131, 154 
 
 Gambling-houses, 139 
 Germany, 53, 74, 77, 79, 80, 
 
 105, 134 
 
 Glacial epoch, 68 
 Gold, 116 
 
 Government, good, 29, 31 
 Grant, Gen'l, 33 
 Grasshoppers, 44 
 Greeley, Horace, 117 
 Gunpowder, 69 
 
 Hamilton, Alex., 109 
 Hancock, 26 
 Harbors, 53 
 
 Hard times, 26, 153, 155 
 Hat-man, 48, 49 
 Hides, 71 
 History, 5 
 Hod-carriers, 96 
 Honduras, 67 
 Honesty, value of, 131 
 Humanitarianism, 86 
 Hydrocephalus, loo. 
 
 Ideals, I, 3, 58 
 
 Illinois, 71 
 
 Immigrants, Immigration, 60, 
 
 105, 121, 122 
 Imports, 2, 6, 14 
 Impracticability of protection, 
 
 130 
 
 Improvements, 90, 133 
 Industry, 14, 34-43, 79, 82, 
 
 123, 125 
 
 Independence, national, 127 
 India, 18 
 Infants, 109, in 
 Insane-asylum, 39 
 Insurance, 107 
 Interest, rate of, 66 
 Inter-Ocean , 71, 95 
 Investigation, sugar, 81 
 Iowa, 95 
 Ireland, 18, 60 
 Irishman, 60 
 Iron, 32, 44, 46, 71, 103, 107, 
 
 123, 125 
 
 Iron Association, 95 
 -Ism, xo 
 
 Jam, 81 
 
 fcpan, 69, 73, 127 
 
 Jefferson, 71 
 
 Journal des Economistesrf^ no 
 
 Kansas, 154 
 
 Labor, Laborer, 10, 13, 21, 38, 
 51, 57 65, 71, 90, 
 9!-98 133 
 , pauper, 44, 47, 51, 75, 
 
 99, 148 
 
 Laissez-faire, 5, 154 
 Land, 53, 57, 91, 92-98, 117, 
 
 118 
 
 Latitude, 64 
 Law, 13, 94 
 Laws, criminal, 2 
 , navigation, 2 
 
INDEX. 
 
 Laws, poor, 2 
 
 Leather, 37 
 
 Legislation, II, 12, 24, 152 
 
 Legislator, n, 54, 75 
 
 Lehigh Valley, 33 
 
 Liberty, 5, 8 
 
 Library, 30 
 
 Lincoln, 154 
 
 London, 74 
 
 Longitude, 64 
 
 ' ' Lords of Industry," 139 
 
 Louisiana, 83 
 
 Lowell, 71 
 
 Lumber. 71 
 
 Lyons, 154 
 
 Machinery, 2, 6, 90, 104 
 
 Magic, 15, 149, 151 
 
 Mahogany, 67 
 
 Maine, 71 
 
 Manchester, 71 
 
 Manitoba, 71 
 
 Manufactures, IOI, 114, 115, 
 
 117, 118 
 
 Margin of cultivation, 120 
 Marine engines, 75 
 Market, the home, 18, 83, 86 
 
 1 the world's, 18, 116 
 
 ; , the foreign, 83 
 
 , the labor, 92 
 
 Massachusetts, 71 
 
 Bay, 94 
 
 Materials, raw, 2, 83 
 
 Mexico, 71 
 
 Mill, John Stuart, no, 140 
 
 Mineral waters, 8 1 
 
 Mining, 44 
 
 Minnesota. 71 
 
 Miseducation, 139 
 
 Missionaries, 89 
 
 Mississippi Valley, 66, 71, 137 
 
 Missouri, 71 
 
 Monopoly, 2, 74. m,"3. 121, 
 
 128, 129, 139, 145, J 46 
 Money, 112, 140 
 
 Monkeys, 150 
 Morals, 136 
 Mumbo Jumbo, 15 
 
 Nation, I 
 
 , an inferior, 67 
 
 , a strong, 116, 134 
 
 Nationalism, 71 
 
 Navigation laws, 2 
 
 Navy, 2, 15, 86, 87, 88, 145 
 
 New Brunswick, 71 
 
 New England, 32, 114 
 
 New Orleans, 71 
 
 New York, 74, 96 
 
 New Zealand, 84 
 
 Newspapers, 7 
 
 Nickel, 33, 45, 129 
 
 Non-government, 4 
 
 North America, 71 
 
 North American Review, 139 
 
 Nova Scotia, 71 
 
 Nuisance, 42 
 
 Ohio, 32 
 Oil, 116 
 Ore, 37, 53 . 
 Overproduction, III 
 
 Panacea, 152, 
 
 Paper-money, 2O 
 
 Parasite, 39 
 
 Paris, 75 
 
 Parks, 30 
 
 Passport, 8, 122 
 
 Paterson, 7 1 
 
 Paupers, 140 
 
 Peasant-proprietor, 53 
 
 Pennsylvania, 32, 44 
 
 Pensioners, 140 
 
 Perpetual motion, 1 1 
 
 Physician, 21 
 
 Pigeons, 150 
 
 Plunder, 17 
 
 Policy, vigorous foreign, 86, 87 
 
INDEX. 
 
 171 
 
 Political economy, 8, 10, II, 
 
 140 
 
 Poor-houses, 99 
 Population, 53, 54, 77, 92, 117, 
 
 118, 123 
 Pork, 77 
 Porter, R. P., 21 
 Post, N. Y. Evening, 78 
 Potatoes, 71 
 Prices, 2, in, 112, 140 
 Primitive men, 68 
 Princes, 140 
 Prison, 39 
 
 Producer, 14, 140, 145 
 Product, mode of alienating, 17 
 Production, 10, 95 
 
 , cost of, 83 
 
 Profit, 22, 107 
 Proletariat, 92 
 Prosperity, national, I, 6, 7, 9, 
 
 10, n, 15, 21, 24, 25, 31,32, 
 
 33, 52, 53, 54, 61, 102, 115, 
 
 148, 153 
 Purchasing power, 60 
 
 Railroad, 119 
 
 Razor, 67 
 
 Refiners and refining of sugar, 
 80, 81, 82 
 
 Reformation, the Protestant, 8 
 
 Rent, 120 
 
 Reporter, Barbados Agricul- 
 tural, 83 
 
 Resource, natural, 44, 45, 46 
 
 Revenue, 12, 14, 153 
 
 Richmond, Duke of, 33 
 
 Robbery, 17 
 
 Sandwich Islands, 84 
 Santa Maria, 89 
 Savings, 30 
 School, II, 39, 40 
 
 of political science, 152 
 
 Seminary, theological, 89 
 
 Sheffield, 71 
 
 Ships, 75, 89 
 
 Ship-building, 2, 69, 86, 87, 88 
 
 Sidgwick, Prof., 141, 142 
 
 Silk, 37, 67, 142, 145, 154 
 
 Silver coinage, 155 
 
 Sinecurists, 140 
 
 Sisyphus, 137 
 
 Skating-rinks, 139 
 
 Slavery, 8, 55, 155 
 
 Smoke nuisance, 139 
 
 *' Snakes," n 
 
 Socialism, 106 
 
 Social science, 20 
 
 Society, human, I, 3 
 
 Sociology, 5, 6 
 
 Soothsaying, 9 
 
 South America, 67, 71 
 
 Soudan, 150 
 
 Spain, 83 
 
 Specie, importation of, 
 
 St. Gothard, 74 
 
 St. Louis, 32 
 
 Standard of comfort, 30, 52, 
 
 59, 60, 61, 101, 148 
 Standard of gain, 89 
 State, 3, 4, 5, 8, 106, 107, no 
 State in the Union, 71 
 Statesmanship, 5, n, 76 
 Statesman, I, 5, 38, 44, 75, 85, 
 
 86 
 
 Statistics, 52, 102, 117 
 Steel, 103, 124 
 Stewart, A. T., 134 
 Stone, the philosopher's, 9, 15, 
 
 152 
 
 Struggle for existence, 106 
 Subsidies, 75 
 Suburbs, 75 
 Sugar, 67, 79-85 
 Superstition, 133 
 Surplus revenue, 153 
 System, colonial, 2, 78 
 
 , credit, 133 
 
 , protective, 27, 32, 48 
 
172 
 
 INDEX. 
 
 System, wages, 92 
 Swindlers, 140 
 
 Tariff, 15, 18, 48, 83, 96, 97, 
 105, 116, 122 
 
 Taussig, F. W., 24, 152 
 
 Tax, 14, 15, 17 
 
 Taxation, 29, 75, 151, 155 
 
 Tax-gatherer, 59 
 
 Taxes, I, n, 29, 31, 48, 75, 
 87, 98, 101, 133 
 
 , on exports, 2, 6 
 
 , on imports, 2, 6, 12 
 
 , protective, 7, 9, 10, 12, 
 
 13. T 4, 35. 47, 4 8 . 61, in, 
 112, 118, 120, 135, 137,146, 
 
 151 
 
 Tax-payers, 140 
 
 Tea, 67 
 
 Telephone, 37 
 
 Texas, 71 
 
 Theorist, 7 
 
 Theory, 7, 8, 9, 10, 130 
 
 Thread, 129 
 
 Times t N. Y., 32, 89 
 
 Tin, 45 
 
 Trade, 63-72, 125, 128, 134 
 
 Trades, the building, 96 
 
 Trade, carrying, 2, 86, 87, 88 
 
 Trains, 122 
 
 Transportation, 74, 75, 91 
 
 Treasury, 14, 27, 71 
 
 Treaty, commercial, 83-89 
 
 Trial and failure, 9, n 
 
 Tribune, N. Y., 117 
 
 Tribute, 17, 32, 118, 146, 149, 
 
 151 
 
 Turkey, 18 
 Turn-pike, 74 
 
 Tyne, 33 
 Types, 69 
 
 United States, 8, 52, 67, 71, 
 75, 89, 101, 105, 114, 123, 
 129, 133, 151 
 
 Units, 71 
 
 Vegetables, 37 
 
 Victims of the tariff, 10, 155 
 
 of fraud, 140 
 
 Wages, 2, 26, 35, 47, 48, 49 
 
 65, 91-105, 122 
 
 Wages-class, 48, 49, 92, 93 
 War, 87, 89, 132, 151 
 
 , commercial, 132 
 
 Washington, city of, 22, 44, 
 
 47, 89 
 Waste, 31, 43, 46, 62, 148, 153, 
 
 155 
 
 Wealth (see Prosperity), 43 
 Weights and measures, 69 
 Westminster Review ', 150 
 Wheat, 44, 51, 7*. 75, 77, "6, 
 
 125, 134 
 Winthrop, 94 
 Wishes, good, 59 
 West Virginia, 45 
 Wool, 32, 37, 69, 71, 123 
 Wool growers, 32 
 Woolen-mill, 42 
 Woolen-operative, 51 
 Work, 35, 71, 125, 137 
 Working-man, 47 
 Work-shops, public, 107, 126 
 Wright, Carroll, 104 
 
 foung country, no, 134 
 

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