What Is Free Trade? Part 7

It is evident that it would be easy to reverse the argument, and say: If everybody receives as producer, everybody must pay as consumer.

Now what does this prove? Nothing whatever, unless it be that protection _transfers_ riches, uselessly and unjustly. Spoliation does the same.

Again, to prove that the complicated arrangements of this system give even simple compensation, it is necessary to adhere to the "_consequently_" of Mr. Protectionist, and to convince oneself that the price of labor rises with that of the articles protected. This is a question of fact. For my own part I do not believe in it, because I think that the price of labor, like everything else, is governed by the proportion existing between the supply and the demand. Now I can perfectly well understand that _restriction_ will diminish the supply of produce, and consequently raise its price; but I do not as clearly see that it increases the demand for labor, thereby raising the rate of wages. This is the less conceivable to me, because the sum of labor required depends upon the quant.i.ty of disposable capital; and protection, while it may change the direction of capital, and transfer it from one business to another, cannot increase it one penny.

This question, which is of the highest interest, we will examine elsewhere. I return to the discussion of _absolute prices_, and declare that there is no absurdity which cannot be rendered specious by such reasoning as that which is commonly resorted to by protectionists.

Imagine an isolated nation possessing a given quant.i.ty of cash, and every year wantonly burning the half of its produce; I will undertake to prove by the protective theory that this nation will not be the less rich in consequence of such a procedure. For, the result of the conflagration must be, that everything would double in price. An inventory made before this event, would offer exactly the same nominal value as one made after it. Who, then, would be the loser? If John buys his cloth dearer, he also sells his corn at a higher price; and if Peter makes a loss on the purchase of his corn, he gains it back by the sale of his cloth. Thus "every one finds in the increase of the price of his produce, the same proportion as in the increase of his expenses: and thus if everybody pays as consumer, everybody also receives as producer."

All this is nonsense, and not science.

The simple truth is, that whether men destroy their corn and cloth by fire, or by use, the effect is the same as regards price, but not as regards riches, for it is precisely in the enjoyment of the use, that riches--in other words, comfort, well-being--exist.

Restriction may in the same way, while it lessens the abundance of things, raise their prices, so as to leave each individual as rich, _numerically speaking_, as when unembarra.s.sed by it. But because we put down in an inventory three bushels of corn at $1, or four bushels at 75 cents, and sum up the nominal value of each inventory at $3, does it thence follow that they are equally capable of contributing to the necessities of the community?

To this truthful and common-sense view of the phenomenon of consumption it will be my continual endeavor to lead the protectionists; for in this is the end of all my efforts, the solution of every problem. I must continually repeat to them that restriction, by impeding commerce, by limiting the division of labor, by forcing it to combat difficulties of situation and temperature, must in its results diminish the quant.i.ty produced by any fixed quantum of labor.

And what can it benefit us that the smaller quant.i.ty produced under the protective system bears the same _nominal value_ as the greater quant.i.ty produced under the free trade system? Man does not live on _nominal values_, but on real articles of produce; and the more abundant these articles are, no matter what price they may bear, the richer is he.

The following pa.s.sage occurs in the writings of a French protectionist:

"If fifteen millions of merchandise sold to foreign nations, be taken from our ordinary produce, calculated at fifty millions, the thirty-five millions of merchandise which remain, not being sufficient for the ordinary demand, will increase in price to the value of fifty millions. The revenue of the country will thus represent fifteen millions more in value.... There will then be an increase of fifteen millions in the riches of the country; precisely the amount of the importation of money."

This is droll enough! If a country has made in the course of the year fifty millions of revenue in harvests and merchandise, she need but sell one-quarter to foreign nations, in order to make herself one-quarter richer than before! If then she sold the half, she would increase her riches by one-half; and if the last hair of her wool, the last grain of her wheat, were to be changed for cash, she would thus raise her product to one hundred millions, where before it was but fifty! A singular manner, certainly, of becoming rich. Unlimited price produced by unlimited scarcity!

To sum up our judgment of the two systems, let us contemplate their different effects when pushed to the most exaggerated extreme.

According to the protectionist just quoted, the French would be quite as rich, that is to say, as well provided with everything, if they had but a thousandth part of their annual produce, because this part would then be worth a thousand times its natural value! So much for looking at prices alone.

According to us, the French would be infinitely rich if their annual produce were infinitely abundant, and consequently bearing no value at all.

CHAPTER XII.

DOES PROTECTION RAISE THE RATE OF WAGES?

When we hear our beardless scribblers, romancers, reformers, our perfumed magazine writers, stuffed with ices and champagne, as they carefully place in their portfolios the sentimental scissorings which fill the current literature of the day, or cause to be decorated with gilded ornaments their tirades against the egotism and the individualism of the age; when we hear them declaiming against social abuses, and groaning over deficient wages and needy families; when we see them raising their eyes to heaven and weeping over the wretchedness of the laboring cla.s.ses, while they never visit this wretchedness unless it be to draw lucrative sketches of its scenes of misery, we are tempted to say to them: The sight of you is enough to make me sicken of attempting to teach the truth.

Affectation! Affectation! It is the nauseating disease of the day! If a thinking man, a sincere philanthropist, takes into consideration the condition of the working cla.s.ses and endeavors to lay bare their necessities, scarcely has his work made an impression before it is greedily seized upon by the crowd of reformers, who turn, twist, examine, quote, exaggerate it, until it becomes ridiculous; and then, as sole compensation, you are overwhelmed with such big words as: Organization, a.s.sociation; you are flattered and fawned upon until you become ashamed of publicly defending the cause of the working man; for how can it be possible to introduce sensible ideas in the midst of these sickening affectations?

But we must put aside this cowardly indifference, which the affectation that provokes it is not enough to justify.

Working men, your situation is singular! You are robbed, as I will presently prove to you. But no: I retract the word; we must avoid an expression which is violent; perhaps, indeed, incorrect; inasmuch as this spoliation, wrapped in the sophisms which disguise it, is practised, we must believe, without the intention of the spoiler, and with the consent of the spoiled. But it is nevertheless true that you are deprived of the just remuneration of your labor, while no one thinks of causing _justice_ to be rendered to you. If you could be consoled by the noisy appeals of your champions to philanthropy, to powerless charity, to degrading almsgiving, or if the high-sounding words of Voice of the People, Rights of Labor, &c., would relieve you--these indeed you can have in abundance. But _justice_, simple _justice_--this n.o.body thinks of rendering you. For would it not be _just_ that after a long day's labor, when you have received your wages, you should be permitted to exchange them for the largest possible sum of comforts you can obtain voluntarily from any man upon the face of the earth?

I too, perhaps, may some day speak to you of the Voice of the People, the Rights of Labor, &c., and may perhaps be able to show you what you have to expect from the chimeras by which you allow yourselves to be led astray.

In the meantime let us examine if _injustice_ is not done to you by the legislative limitation of the number of persons from whom you are allowed to buy those things which you need; as iron, coal, cotton and woollen cloths, &c.; thus artificially fixing (so to express myself) the price which these articles must bear.

Is it true that protection, which avowedly raises prices, and thus injures you, proportionably raises the rate of wages?

On what does the rate of wages depend?

One of your own cla.s.s has energetically said: "When two workmen run after a boss, wages fall; when two bosses run after a workman, wages rise."

Allow me, in similar laconic phrase, to employ a more scientific, though perhaps a less striking expression: "The rate of wages depends upon the proportion which the supply of labor bears to the demand."

On what depends the _demand_ for labor?

On the quant.i.ty of disposable capital seeking investment. And the law which says, "Such or such an article shall be limited to home production and no longer imported from foreign countries," can it in any degree increase this capital? Not in the least. This law may withdraw it from one course, and transfer it to another; but cannot increase it one penny. Then it cannot increase the demand for labor.

While we point with pride to some prosperous manufacture, can we answer, whence comes the capital with which it is founded and maintained? Has it fallen from the moon? or rather is it not drawn either from agriculture, or stock-breeding, or commerce? We here see why, since the reign of protective tariffs, if we see more workmen in our mines and our manufacturing towns, we find also fewer vessels in our ports, fewer graziers and fewer laborers in our fields and upon our hill-sides.

I could speak at great length upon this subject, but prefer ill.u.s.trating my thought by an example.

A countryman had twenty acres of land, with a capital of $10,000. He divided his land into four parts, and adopted for it the following changes of crops: 1st, maize; 2d, wheat; 3d, clover; and 4th, rye. As he needed for himself and family but a small portion of the grain, meat, and dairy produce of the farm, he sold the surplus and bought iron, coal, cloths, etc. The whole of his capital was yearly distributed in wages and payments of accounts to the workingmen of the neighborhood. This capital was, from his sales, again returned to him, and even increased from year to year. Our countryman, being fully convinced that idle capital produces nothing, caused to circulate among the working cla.s.ses this annual increase, which he devoted to the inclosing and clearing of lands, or to improvements in his farming utensils and his buildings. He deposited some sums in reserve in the hands of a neighboring banker, who on his part did not leave these idle in his strong-box, but lent them to various tradesmen, so that the whole came to be usefully employed in the payment of wages.

The countryman died, and his son, become master of the inheritance, said to himself: "It must be confessed that my father has, all his life, allowed himself to be duped. He bought iron, and thus paid _tribute_ to England, while our own land could, by an effort, be made to produce iron as well as England. He bought coal, cloths, and oranges, thus paying _tribute_ to New Brunswick, France, and Sicily, very unnecessarily; for coal may be found, doeskins may be made, and oranges may be forced to grow, within our own territory. He paid tribute to the foreign miner and the weaver; our own servants could very well mine our iron and get up native doeskins almost as good as the French article. He did all he could to ruin himself, and gave to strangers what ought to have been kept for the benefit of his own household."

Full of this reasoning, our headstrong fellow determined to change the routine of his crops. He divided his farm into twenty parts. On one he dug for coal; on another he erected a cloth factory; on a third he put a hot-house and cultivated the orange; he devoted the fourth to vines, the fifth to wheat, &c., &c. Thus he succeeded in rendering himself _independent_, and furnished all his family supplies from his own farm. He no longer received anything from the general circulation; neither, it is true, did he cast anything into it. Was he the richer for this course? No; for his mine did not yield coal as cheaply as he could buy it in the market, nor was the climate favorable to the orange. In short, the family supply of these articles was very inferior to what it had been during the time when the father had obtained them and others by exchange of produce.

With regard to the demand for labor, it certainly was no greater than formerly. THERE WERE, TO BE SURE, FIVE TIMES AS MANY FIELDS TO CULTIVATE, BUT THEY WERE FIVE TIMES SMALLER. If coal was mined, there was also less wheat; and because there were no more oranges bought, neither was there any more rye sold. Besides, the farmer could not spend in wages more than his capital, and his capital, instead of increasing, was now constantly diminis.h.i.+ng. A great part of it was necessarily devoted to numerous buildings and utensils, indispensable to a person who determines to undertake everything. In short, the supply of labor continued the same, but the means of paying became less.

The result is precisely similar when a nation isolates itself by the prohibitive system. Its number of industrial pursuits is certainly multiplied, but their importance is diminished. In proportion to their number, they become less productive, for the same capital and the same skill are obliged to meet a greater number of difficulties. The fixed capital absorbs a greater part of the circulating capital; that is to say, a greater part of the funds destined to the payment of wages.

What remains, ramifies itself in vain; the quant.i.ty cannot be augmented. It is like the water of a deep pond, which, distributed among a mult.i.tude of small reservoirs, appears to be more abundant, because it covers a greater quant.i.ty of soil, and presents a larger surface to the sun, while we hardly perceive that, precisely on this account, it absorbs, evaporates, and loses itself the quicker.

Capital and labor being given, the result is, a sum of production, always the less great in proportion as obstacles are numerous. There can be no doubt that international barriers, by forcing capital and labor to struggle against greater difficulties of soil and climate, must cause the general production to be less, or, in other words, diminish the portion of comforts which would thence result to mankind.

If, then, there be a general diminution of comforts, how, working men, can it be possible that _your_ portion should be increased? Under such a supposition it would be necessary to believe that the rich, those who made the law, have so arranged matters, that not only they subject themselves to their own proportion of the general diminution, but taking the whole of it upon themselves, that they submit also to a further loss in order to increase your gains. Is this credible? Is this possible? It is, indeed, a most suspicious act of generosity; and if you act wisely you will reject it.

CHAPTER XIII.

THEORY AND PRACTICE.

Defenders of free trade, we are accused of being mere theorists, of not giving sufficient weight to the practical.

"What a fearful charge against you, free traders," say the protectionists, "is this long succession of distinguished statesmen, this imposing race of writers, who have all held opinions differing from yours!" This we do not deny. We answer, "It is said, in support of established errors, that 'there must be some foundation for ideas so generally adopted by all nations. Should not one distrust opinions and arguments which overturn that which, until now, has been held as settled; that which is held as certain by so many persons whose intelligence and motives make them trustworthy?'"

We confess this argument should make a profound impression, and ought to throw doubt on the most incontestable points, if we had not seen, one after another, opinions the most false, now generally acknowledged to be such, received and professed by all the world during a long succession of centuries. It is not very long since all nations, from the most rude to the most enlightened, and all men, from the street-porter to the most learned philosopher, believed in the four elements. n.o.body had thought of contesting this doctrine, which is, however, false; so much so, that at this day any mere naturalist's a.s.sistant, who should consider earth, water, and fire, elements, would disgrace himself.

On which our opponents make this observation: "If you suppose you have thus answered the very forcible objection you have proposed to yourselves, you deceive yourselves strangely. Suppose that men, otherwise intelligent, should be mistaken on any point whatever of natural history for many centuries, that would signify or prove nothing. Would water, air, earth, fire, be less useful to man whether they were or were not elements? Such errors are of no consequence; they lead to no revolutions, do not unsettle the mind; above all, they injure no interests, so they might, without inconvenience, endure for millions of years. The physical world would progress just as if they did not exist. Would it be thus with errors which attack the moral world? Can we conceive that a system of government, absolutely false, consequently injurious, could be carried out through many centuries, among many nations, with the general consent of educated men? Can we explain how such a system could be reconciled with the ever-increasing prosperity of nations? You acknowledge that the argument you combat ought to make a profound impression. Yes, truly, and this impression remains, for you have rather strengthened than destroyed it."

Or again, they say: "It was only in the middle of the last century, the eighteenth century, in which all subjects, all principles, without exception, were delivered up to public discussion, that these furnishers of speculative ideas which are applied to everything without being applicable to anything--commenced writing on political economy. There existed, however, a system of political economy, not written, but practised by governments. It is said that Colbert was its inventor, and it was the rule of all the States of Europe. What is more singular, it has remained so till lately, despite anathemas and contempt, and despite the discoveries of the modern school. This system, which our writers have called the _mercantile system_, consists in opposing, by prohibitions and duties, such foreign productions as might ruin our manufacturers by their compet.i.tion. This system has been p.r.o.nounced futile, absurd, capable of ruining any country, by economical writers of all schools. It has been banished from all books, reduced to take refuge in the practice of every people; and we do not understand why, in regard to the wealth of nations, governments should not have yielded themselves to wise authors rather than to _the old experience_ of a system. Above all, we cannot conceive why, in political economy, the American government should persist in resisting the progress of light, and in preserving, in its practice, those old errors which all our economists of the pen have designated. But we have said too much about this mercantile system, which has in its favor _facts_ alone, though sustained by scarcely a single writer of the day."