CH. IX.

COMMERCE AND WAR.

329

earnest exertions, in which, should they distinguish themselves, they win 'glory.'

The natural sentiments of humanity are shocked by such abuses of privilege as occasionally occur, and these sentiments find utterance when an unsuccessful war brings disaster on the nation. Such a period is that wherein the privileged classes are most likely to give way to an extension of freedom, and a corresponding curtailment of privilege.

The interests of commerce will always tend to increase, and where the dominating classes yield, they yield because the growing power threatens them, and because a compromise is prudent. When such compromises become the rule, then the State grows naturally, the old power yielding to the new, as the latter is able to take the position of the former. When, however, the course of this development is suddenly checked, and the repressive rule of a Louis XIV., a Nicholas, or a Philip II., should stay all progress, and endeavour to extinguish the existing liberty, the restrained impulses of freedom will, as history testifies, burst out in the subsequent reigns, and compel by one means or other a new instalment of liberty.

Commerce, and what leads up to it, is the resource of the masses of society who have attained social freedom, and are in a suitable position to maintain and guard it, and after the masses it becomes in time at least in some measure the resource also of the upper classes. Freedom, as we have seen, is not granted as a boon from above, for in the act of granting it the privileged classes would destroy themselves; it must be wrenched, as it has been both in French and in English history, from them by force, or by the apprehension of it. An act of freedom, therefore, if it were not to proceed from the instinct of self-preservation, is one which must benefit the privileged classes quite

as much as it can be supposed it will benefit the masses. The intention may be humane enough, but it must not raise the latter at the expense of the former, who, by the interest of their privileges, assiduously support the throne.

The gradual enlargement of the interests of commerce is the only means by which human liberties can ever be built up upon a secure foundation. We have here the unrivalled strength of interests which are universal in their range and magnitude, and of a kind that appeals powerfully to the most untutored sense. Upon this adamantine and widespread foundation, therefore, must the progress of humanity be built up in the future, and in the degree in which this doctrine is recognised and practised will the desired progress be realised.

When freedom, therefore, has been attained, the first consideration becomes how it is to be completely consolidated. It has been created by the aggregation of individual interests, and can only be continued and strengthened by an extension of them. The great object, then, is to know by what means these interests can be most rapidly extended.

It may be at once said that no policy can be so successful as that of free trade, and the abolition of all restriction. When individual energy possesses the most unlimited field for its exercise, and when there is nothing to hamper that exercise, there will be the greatest exertion, and that exertion will be most productive. What is called for is that the energy of one shall not spoil the labours of another. No one must be allowed to obtain privileges that are inimical to the general welfare; there must be perfect freedom, and an entire absence of artificial restriction or protection.' It is necessary to define how protection' acts.

CH. IX.

WHAT IS 'PROTECTION?

331

The feeling of patriotism must cling to the word protection,' and to the thing supposed to be represented by that word; and therefore it becomes all the more necessary to describe what it really is, and what are its influences.

It is, then, so far different from free trade, that it is trade restricted and guided along artificial channels with the view of producing certain effects different from those that would otherwise result. It is supposed, for instance, when a country is mostly agricultural, or when its natural advantages are acknowledged to lie in this direction, that there is a deficiency of manufacturing industry that ought to be promoted, and the Government, therefore, steps in to present certain obstacles to the free flow of the imports from foreign countries of the articles forming the subject of manufactures. A high degree of protective, or a still higher degree of prohibitory duties, checks or stops the flow of the said articles. But the articles-it may be, for instance, indispensable clothing- must be obtained, and they must be had from some other source. One current-the natural one-has been virtually annihilated, and an artificial one has to be created, and it must be created by a diversion of capital and labour from other occupations that had been carried on with the greatest practicable amount of success. It may be pleaded, however, that as regards the capital, the advantages which protection affords will induce it to come from other countries, and that therefore more capital will be employed in the State that adopts this system, to the benefit of all classes. It is forgotten, however, that capital will not flow freely to the industry protected, because the success of the industry is known to depend upon artificial restriction, which may at any time be removed. But even should capital to an appreciable extent be introduced from abroad, it can never represent

so much benefit to the community as that which was employed abroad in the manufacture of the goods whose import has been prohibited, and the resources of the country wherein industries are protected will suffer more or less The whole labouring population who are paid by wages will feel the effect most severely, for they are deprived of those articles which would have been imported from abroad, of good quality and at a low price, and they have substitutes offered that necessarily in these respects are less advantageous to them.

But if the working classes are compelled to purchase dearer and worse goods, then their wages must be raised to enable them to do so, for, presumably, they cannot live and labour on much less than they did before the restriction was imposed. But if wages advance, profits must fall in every business except those protected. But if profits fall, less capital will be employed, and it will either be exported to other countries, or it will not come into existence. Then, as capital is reduced, business will be contracted, and the employed labourers will be discharged; and however rich the country, although awaiting the development of extensive resources, every step in the direction of protection must, cæteris paribus, infallibly cause a reduction in the capital of the country, and of the labourers employed. Of course it may be that in a very large country almost every article can be produced which the community can require, and it might, therefore, be supposed, that that country is selfdependent. In fact, however, no country does occupy that position, and for this reason, it will possess some advantage peculiar to it the utilisation of which will enable the energies of the citizens to be expended with the maximum amount of profit. Thus, it may possess an immense breadth of virgin soil which is ready to yield up the accumulated resources of ages in

CH. IX. PROTECTION AND THE WORKING CLASSES.

333

the form of cheap food-food so cheap, perhaps, that after it has been transported around half the globe, a peculiar profit is left to the producer upon its sale.

The country which receives the food cannot, it may be, pay for it more advantageously than by the exportation of a corresponding value of manufactured articles, which the abundance of her capital and the rapid development of her mineral resources, as well as the skill of her people, enable her again perhaps to do with a peculiar profit. These manufactured articles, then, go to pay for the food imported. The food growers in the first country receive such articles at a cheaper rate than if they had been produced in their own country, for in that case some proportion of the farmers must have left the cultivation of their fields to commence the manufacture of them, having none of those advantages possessed by the other country, and with the disadvantage of requiring to leave their virgin soil, which demands the application of the least labour and the least capital, to produce year after year abundance of the cheapest food.

But instead of the natural flow of commerce being allowed to continue unrestricted, State policy says without adequate reason, for there can be none, that there must be protection' for national industries; and what follows?

The manufactures of the second country must pay, say, 50 per cent. on their value before they can enter the first. The farmers of the first country, then, cannot produce the same amount of food at the same rate of expenditure; and if we suppose that such rate is increased in consequence of the change of system by one-eighth, from the necessary outlay by the farmers of one-quarter their income on foreign manufactured articles that have been taxed 50 per cent., their produce mustthat is to say, if we meantime leave out of account the