AGAINST FREE TRADE. 363 consider the employment given by a customer to the capital and labour of a producer as his only source of gain and maintenance, look upon such employment as an end rather than a means, and imagine every change which lessens the quantity of labour and capital employed in producing a commodity to be injurious instead of beneficial. It is, in fact, precisely the same vulgar error which leads to the outcry against improved machinery, viz. because it effects a saving in the labour or capital expended in any branch of production; as if this were no benefit, but the contrary. It is forgotten in both cases, that though the change may for a time derange the industry of some parties,-may throw out of work the labourers, and reduce the value of the capital employed in the particular branch of industry it supersedes, it must cause at least an equal demand for labour and capital in some other branch; so that the body of labourers and capitalists, or the producers as a whole, cannot lose, while the greater cheapness of the article to all its consumers is a clear additional gain to the community. But in truth an increase of the aggregate demand for the produce of industry always follows every increase in the facilities for production; the desires of man universally expanding with his means for satisfying them. 3. And thus a third fallacy is involved in the usual arguments against free trade. It is taken for granted that there will be the same demand for the inferior and dearer home-made article as for the better and cheaper foreign product; whereas it is precisely the superior cheapness and quality of the latter that creates a demand where none would otherwise exist, and stimulates exertion to procure the means of satisfying it. And since it has been shown that, to satisfy this demand, an equivalent of home manufactures must be exported, it is evident that the admission of foreign goods, by tempting customers, is the cause and origin of an increased demand for goods of home make. It is also the cause of great improvement in their quality, by rousing the emulation of the native manufacturer, and offering him models for imitation. In fact, to prevent the introduction of foreign fabrics to compete with our own, is to offer a premium to sloth and negligence; and experience has proved that such competition is always followed by a rapid improvement in the home-made article. The history of the protecting system shows that it had its origin at a period when nothing was known by statesmen and legislators of sound principles of trade. It seems to have been introduced into European policy by M. Colbert. Before his time Holland supplied all Europe with manufactures, and received in payment for them the raw produce of her poor neighbours. M. Colbert, overlooking the fact, that manufactures cannot be established in a country until it has acquired a considerable capital, and until the people of it have become rich enough to be able to buy them, sought to force the growth of manufactures in France, merely by issuing his famous tariff of 1667, by which the importation of all manufactures into France was prohibited. The failure of his theory is amply attested by experience. France, ever since that period, has been paying for the manufactures used ITS HISTORY AND MISCHIEF. 365 by her (taking price and quality into consideration) from half to twice as much more as England and Holland have paid for similar articles, and her establishments have continued of the most wretched description till within a few years. They are now, in consequence of the high prices and limited consumption which are the effects of protection, greatly depressed below what they would be if no protection had ever existed, for France is a country possessing great natural advantages for carrying on manufactures. 'Immediately after the appearance of the tariff of 1667, the Dutch retaliated by prohibiting the importation of the wines, brandies, and other productions of France*. This commercial warfare produced open hostilities in 1672, and a war that lasted six years; and it is to commercial prohibition and retaliation that most of the wars in Europe, since 1667, are to be attributed. 'England followed the example of Holland in prohibiting French productions; and from that time has been amongst the foremost of nations in loading her commercial legislation with all kinds of mischievous and erroneous regulations. 'As this system of protection has been steadily acted upon by all nations since 1667, on a most mistaken notion, which has been generally entertained, that the protection of trade was a necessary part of the duty of the executive government, when it is considered, on the one hand, what the consequences would have been throughout the world of allowing trade and manufactures to take their natural course in supplying every country * Richesse de la Hollande, vol. i., p. 345. with every article of production of the best quality, and at the lowest possible price, and in advancing universal wealth and civilization; and on the other, what the consequences have been of the numerous wars which the system of protecting trade and manufactures has given rise to, we cannot avoid coming to the conclusion, that those statesmen who invented this system, and who have supported it, and do still support it, deserve to be classed among the greatest enemies to the civilization and happiness of mankind.’* Few political errors have, indeed, occasioned more mischief than this. The regulating mania which it inspired, has tormented industry in a thousand ways to force it from its natural channel. It has falsely taught nations as well as individuals to regard the welfare of their neighbours as incompatible with their own. It has fostered a spirit of artifice and conspiracy of class against class, and interest against interest,-each trying to gain legislative favour at the expense of the rest. The prices of most articles have been forcibly enhanced by protecting duties or legislative monopolies. By this awkward system of each robbing each, all parties have been losers, and the sum of national wealth, comfort, and prosperity proportionately lessened. We must refer to the remainder of the chapter of Sir H. Parnell's excellent work, from which we have extracted the above, for an account of the partial and imperfect steps that have been taken of late years by the government of this country for the correction of this mischievous error. *Parnell, p. 75. ITS FALLACY AND MISCHIEF. 367 Certainly it would be impossible to conceive a more suicidal policy for a great manufacturing and commercial country like this, than a system which strikes at the very root of all commercial and manufacturing industry. No conduct was The so fitted to produce an effect the very reverse of the object aimed at, as that of the politicians who, at a time when wages and profits are ruinously low, would continue these restraints on the profitable employment of capital and labour, for the declared purpose of encouraging their employment. They forget that labour and capital are set in motion, not for the mere pleasure of the toil or expenditure, but for the sake of their returns. higher their returns, the greater the inducement to the employment of the labour and the capital. The less the returns, the less the inducement to set capital and labour in motion. Now, to prevent the production of any article at the least possible sacrifice is directly to lessen the attainable returns to labour and capital, and, therefore, to check, not to encourage, their employment. The circumstance of the existing glut of labour and capital seeking vainly for profitable employment, instead of being, as is pretended, a ground for excluding foreign manufactures with the view of encouraging our own, is, on the contrary, in a great degree caused by the operation of this restrictive system, and is the strongest argument for encouraging our home manufactures by admitting, on the lowest terms consistent with purposes of revenue, those foreign productions for which a demand exists in this country, and to procure which an equivalent must be exported of |