Life and Works of Abraham Lincoln/Volume 3/The Home Market and Other Advantages of a Protective Tariff
The Home Market and Other Advantages of a Protective Tariff.
Notes Jotted Down While Congressman-Elect. About December 1, 1847.
Whether the protective policy shall be finally abandoned is now the question.—Discussion and experience already had, and question now in greater dispute than ever.—Has there not been some great error in the mode of discussion?—Propose a single issue of fact, namely: From 1816 to the present, have protected articles cost us more of labor during the higher than during the lower duties upon them?—Introduce the evidence.—Analyze this issue, and try to show that it embraces the true and the whole question of the protective policy.—Intended as a test of experience.—The period selected is fair, because it is a period of peace—a period sufficiently long [to] furnish a fair average under all other causes operating on prices, a period in which various modifications of higher and lower duties have occurred.—Protected articles only are embraced. Show that these only belong to the question.—The labor price only is embraced. Show this to be correct.
I suppose the true effect of duties upon prices to be as follows: If a certain duty be levied upon an article which by nature cannot be produced in this country, as three cents a pound upon coffee, the effect will be that the consumer will pay one cent more per pound than before, the producer will take one cent less, and the merchant one cent less in profits; in other words, the burden of the duty will [be] distributed over consumption, production, and commerce, and not confined to either. But if a duty amounting to full protection be levied upon an article which can be produced here with as little labor as elsewhere,—as iron,—that article will ultimately, and at no distant day, in consequence of such duty, be sold to our people cheaper than before, at least by the amount of the cost of carrying it from abroad.
First. As to useless labor. Before proceeding, however, it may be as well to give a specimen of what I conceive to be useless labor. I say, then, that all carrying, and incidents of carrying, of articles from the place of their production to a distant place for consumption, which articles could be produced of as good quality, in sufficient quantity and with as little labor, at the place of consumption as at the place carried from, is useless labor. Applying this principle to our own country by an example, let us suppose that A and B are a Pennsylvania farmer and a Pennsylvania iron-maker whose lands are adjoining. Under the protective policy A is furnishing B with bread and meat, and vegetables and fruits, and food for horses and oxen, and fresh supplies of horses and oxen themselves occasionally, and receiving in exchange all the iron, iron utensils, tools, and implements he needs. In this process of exchange each receives the whole of that which the other parts with, and the reward of labor between them is perfect—each receiving the product of just so much labor as he has himself bestowed on what he parts with for it. But the change comes. The protective policy is abandoned, and A determines to buy his iron and iron manufactures of C in Europe. This he can only do by a direct or an indirect exchange of the produce of his farm for them. We will suppose the direct exchange is adopted. In this A desires to exchange ten barrels of flour—the precise product of one hundred days' labor—for the largest quantity of iron, etc., that he can get. C also wishes to exchange the precise product, in iron, of one hundred days' labor for the greatest quantity of flour he can get. In intrinsic value the things to be so exchanged are precisely equal. But before this exchange can take place, the flour must be carried from Pennsylvania to England, and the iron from England to Pennsylvania. The flour starts. The wagoner who hauls it to Philadelphia takes a part of it to pay him for his labor; then a merchant there takes a little more for storage and forwarding commission, and another takes a little more for insurance; and then the ship-owner carries it across the water, and takes a little more of it for his trouble. Still, before it reaches C, it is tolled two or three times more for storage, drayage, commission, and so on; so that when C gets it there are but seven and a half barrels of it left. The iron, too, in its transit from England to Pennsylvania goes through the same process of tolling; so that when it reaches A there are but three quarters of it left. The result of this case is that A and C have each parted with one hundred days' labor, and each received but seventy-five in return. That the carrying in this case was introduced by A ceasing to buy of B and turning [to] C; that it was utterly useless; and that it is ruinous in its effects upon A, are all little less than self-evident. "But," asks one, "if A is now only getting three quarters as much iron from C for ten barrels of flour as he used to get of B, why does he not turn back to B?" The answer is: "B has quit making iron, and so has none to sell." "But why did B quit making?" "Because A quit buying of him, and he had no other customer to sell to." "But surely A did not cease buying of B with the expectation of buying of C on harder terms?" "Certainly not. Let me tell you how that was. When B was making iron as well as C, B had but one customer, this farmer A; C had four customers in Europe."
It seems to be an opinion very generally entertained that the condition of a nation is best whenever it can buy cheapest; but this is not necessarily true, because if, at the same time and by the same cause, it is compelled to sell correspondingly cheap, nothing is gained. Then it is said the best condition is when we can buy cheapest and sell dearest; but this again is not necessarily true, because with both these we might have scarcely anything to sell, or, which is the same thing, to buy with. To illustrate this, suppose a man in the present state of things is laboring the year round, at ten dollars per month, which amounts in the year to $120. A change in affairs enables him to buy supplies at half the former price, to get fifty dollars per month for his labor, but at the same time deprives him of employment during all the months of the year but one. In this case, though goods have fallen one half, and labor risen five to one, it is still plain that at the end of the year the laborer is twenty dollars poorer than under the old state of things.
These reflections show that to reason and act correctly on this subject we must look not merely to buying cheap, nor yet to buying cheap and selling dear, but also to having constant employment, so that we may have the largest possible amount of something to sell. This matter of employment can only be secured by an ample, steady, and certain market to sell the products of our labor in.
But let us yield the point, and admit that by abandoning the protective policy our farmers can purchase their supplies of manufactured articles cheaper than by continuing it; and then let us see whether, even at that, they will upon the whole be gainers by the change. To simplify this question, let us suppose the whole agricultural interest of the country to be in the hands of one man, who has one hundred laborers in his employ; the whole manufacturing interest to be in the hands of one other man, who has twenty laborers in his employ. The farmer owns all the plow and pasture land, and the manufacturer all the iron-mines and coal-banks and sites of water-power. Each is pushing on in his own way, and obtaining supplies from the other so far as he needs,—that is, the manufacturer is buying of the farmer all the cotton he can use in his cotton-factory; all the wool he can use in his woolen establishment; all the bread and meat, as well as all the fruits and vegetables, which are necessary for himself and all his hands in all his departments; all the corn and oats and hay which are necessary for all his horses and oxen, as well as fresh supplies of horses and oxen themselves to do all his heavy hauling about his iron-works and generally of every sort. The farmer, in turn, is buying of the manufacturer all the iron, iron tools, wooden tools, cotton goods, woolen goods, etc., that he needs in his business and for his hands. But after a while farmer discovers that were it not for the protective policy he could buy all these supplies cheaper from a European manufacturer, owing to the fact that the price of labor is only one quarter as high there as here. He and his hands are a majority of the whole, and therefore have the legal and moral right to have their interest first consulted. They throw off the protective policy, and farmer ceases buying of home manufacturer. Very soon, however, he discovers that to buy even at the cheaper rate requires something to buy with, and somehow or other he is falling short in this particular.
In the early days of our race the Almighty said to the first of our race, "In the sweat of thy face shalt thou eat bread"; and since then, if we except the light and the air of heaven, no good thing has been or can be enjoyed by us without having first cost labor. And inasmuch as most good things are produced by labor, it follows that all such things of right belong to those whose labor has produced them. But it has so happened, in all ages of the world, that some have labored, and others have without labor enjoyed a large proportion of the fruits. This is wrong, and should not continue. To secure to each laborer the whole product of his labor, or as nearly as possible, is a worthy object of any good government.
But then a question arises, How can a government best effect this? In our own country, in its present condition, will the protective principle advance or retard this object? Upon this subject the habits of our whole species fall into three great classes—useful labor, useless labor, and idleness. Of these the first only is meritorious, and to it all the products of labor rightfully belong; but the two latter, while they exist, are heavy pensioners upon the first, robbing it of a large portion of its just rights. The only remedy for this is to, so far as possible, drive useless labor and idleness out of existence. And, first, as to useless labor. Before making war upon this, we must learn to distinguish it from the useful. It appears to me that all labor done directly and indirectly in carrying articles to the place of consumption, which could have been produced in sufficient abundance, with as little labor, at the place of consumption as at the place they were carried from, is useless labor. Let us take a few examples of the application of this principle to our own country. Iron, and everything made of iron, can be produced in sufficient abundance, and with as little labor, in the United States as anywhere else in the world; therefore all labor done in bringing iron and its fabrics from a foreign country to the United States is useless labor. The same precisely may be said of cotton, wool, and of their fabrics respectively, as well as many other articles. While the uselessness of the carrying labor is equally true of all the articles mentioned, and of many others not mentioned, it is perhaps more glaringly obvious in relation to the cotton goods we purchase from abroad. The raw cotton from which they are made itself grows in our own country, is carried by land and by water to England, is there spun, wove, dyed, stamped, etc., and then carried back again and worn in the very country where it grew, and partly by the very persons who grew it. Why should it not be spun, wove, etc., in the very neighborhood where it both grows and is consumed, and the carrying thereby dispensed with? Has nature interposed any obstacle? Are not all the agents—animal-power, water-power, and steam-power—as good and as abundant here as elsewhere? Will not as small an amount of human labor answer here as elsewhere? We may easily see that the cost of this useless labor is very heavy. It includes not only the cost of the actual carriage, but also the insurances of every kind, and the profits of the merchants through whose hands it passes. All these create a heavy burden necessarily falling upon the useful labor connected with such articles, either depressing the price to the producer or advancing it to the consumer, or, what is more probable, doing both in part.
A supposed case will serve to illustrate several points now to the purpose. A, in the interior of South Carolina, has one hundred pounds of cotton, which we suppose to be the precise product of one man's labor for twenty days. B, in Manchester, England, has one hundred yards of cotton cloth, the precise product of the same amount of labor. This lot of cotton and lot of cloth are precisely equal to each other in their intrinsic value. But A wishes to part with his cotton for the largest quantity of cloth he can get. B also wishes to part with his cloth for the greatest quantity of cotton he can get. An exchange is therefore necessary; but before this can be effected, the cotton must be carried to Manchester, and the cloth to South Carolina. The cotton starts to Manchester. The man that hauls it to Charleston in his wagon takes a little of it out to pay him for his trouble; the merchant who stores it a while before the ship is ready to sail takes a little out for his trouble; the ship-owner who carries it across the water takes a little out for his trouble. Still, before it gets to Manchester it is tolled two or three times more for drayage, storage, commission, and so on; so that when it reaches B's hands there are but seventy-five pounds of it left. The cloth, too, in its transit from Manchester to South Carolina, goes through the same process of tolling; so that when it reaches A there are but seventy-five yards of it. Now, in this case, A and B have each parted with twenty days' labor, and each received but fifteen in return. But now let us suppose that B has removed to the side of A's farm in South Carolina, and has there made his lot of cloth. Is it not clear that he and A can then exchange their cloth and cotton, each getting the whole of what the other parts with?
This supposed case shows the utter uselessness of the carrying labor in all similar cases, and also the direct burden it imposes upon useful labor. And whoever will take up the train of reflection suggested by this case, and run it out to the full extent of its just application, will be astonished at the amount of useless labor he will thus discover to be done in this very way. I am mistaken if it is not in fact many times over equal to all the real want in the world. This useless labor I would have discontinued, and those engaged in it added to the class of useful laborers. If I be asked whether I would destroy all commerce, I answer, Certainly not; I would continue it where it is necessary, and discontinue it where it is not. An instance: I would continue commerce so far as it is employed in bringing us coffee, and I would discontinue it so far as it is employed in bringing us cotton goods.
But let us yield the point, and admit that by abandoning the protective policy our farmers can purchase their supplies of manufactured articles cheaper than before; and then let us see whether, even at that, the farmers will upon the whole be gainers by the change. To simplify this question, let us suppose our whole population to consist of but twenty men. Under the prevalence of the protective policy, fifteen of these are farmers, one is a miller, one manufactures iron, one implements from iron, one cotton goods, and one woolen goods. The farmers discover that, owing to labor only costing one quarter as much in Europe as here, they can buy iron, iron implements, cotton goods, and woolen goods cheaper when brought from Europe than when made by their neighbors. They are the majority, and therefore have both the legal and moral right to have their interest first consulted. They throw off the protective policy, and cease buying these articles of their neighbors. But they soon discover that to buy, and at the cheaper rate, requires something to buy with. Falling short in this particular, one of these farmers takes a load of wheat to the miller and gets it made into flour, and starts, as had been his custom, to the iron furnace. He approaches the well-known spot, but, strange to say, all is cold and still as death; no smoke rises, no furnace roars, no anvil rings. After some search he finds the owner of the desolate place, and calls out to him, "Come, Vulcan, don't you want to buy a load of flour?" "Why," says Vulcan, "I am hungry enough, to be sure,—haven't tasted bread for a week; but then you see my works are stopped, and I have nothing to give you for your flour." "But, Vulcan, why don't you go to work and get something?" "I am ready to do so. Will you hire me, farmer?" "Oh, no, I could only set you to raising wheat, and you see I have more of that already than I can get anything for." "But give me employment, and send your flour to Europe for a market." "Why, Vulcan, how silly you talk! Don't you know they raise wheat in Europe as well as here, and that labor is so cheap there as to fix the price of flour there so low as scarcely to pay the long carriage of it from here, leaving nothing whatever to me?" "But, farmer, couldn't you pay to raise and prepare garden stuffs, and fruits, such as radishes, cabbages, Irish and sweet potatoes, cucumbers, watermelons and musk-melons, plums, pears, peaches, apples, and the like? All these are good things, and used to sell well." "So they did use to sell well; but it was to you we sold them, and now you tell us you have nothing to buy with. Of course I cannot sell such things to the other farmers, because each of them raises enough for himself, and in fact rather wishes to sell than to buy. Neither can I send them to Europe for a market, because, to say nothing of European markets being stocked with such articles at lower prices than I can afford, they are of such a nature as to rot before they could reach there. The truth is, Vulcan, I am compelled to quit raising these things altogether, except a few for my own use; and this leaves part of my own time idle on my hands, instead of my finding employment for you."
If at any time all labor should cease, and all existing provisions be equally divided among the people, at the end of a single year there could scarcely be one human being left alive: all would have perished by want of subsistence. So, again, if upon such division all that sort of labor which produces provisions should cease, and each individual should take up so much of his share as he could, and carry it continually around his habitation, although in this carrying the amount of labor going on might be as great as ever so long as it could last, at the end of the year the result would be precisely the same—that is, none would be left living.
The first of these propositions shows that universal idleness would speedily result in universal ruin; and the second shows that useless labor is in this respect the same as idleness. I submit, then, whether it does not follow that partial idleness and partial useless labor would, in the proportion of their extent, in like manner result in partial ruin; whether, if all should subsist upon the labor that one half should perform, it would not result in very scanty allowance to the whole.
Believing that these propositions and the conclusions I draw from them cannot be successfully controverted, I for the present assume their correctness, and proceed to try to show that the abandonment of the protective policy by the American government must result in the increase of both useless labor and idleness, and so, in proportion, must produce want and ruin among our people.