Page:EB1911 - Volume 22.djvu/482

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467
PROTECTION


of talents and dispositions which discriminate men from each other. (5) A more ample and various field for enterprise. (6) In many cases a new, and in all a more certain and steady demand for the surplus produce of the soil. (7) A more lucrative and prosperous trade than if the country were solely agricultural. Among the feasible means of promoting the development of such an industry he mentions the following: (1) Protective duties, or duties on foreign articles which are the rivals of the domestic ones, to be encouraged. (2) Prohibition of rival articles or duties equivalent to prohibition. (3) Prohibition of the exportation of the materials of manufactures. (4) Pecuniary bounties. (5) Premiums. (6) Exemption of the materials of manufactures from duty. (7) Drawbacks of the duties which are imposed on the materials of manufactures. (8) The encouragement of new inventions and discoveries at home, and the introduction into the United States of such as may have been made in other countries; particularly those which relate to machinery. (9) judicious regulations for the inspection of manufactured commodities. (ro) The facilitating of the pecuniary remittances from place to place.

The above suggestions contain the outline of a comprehensive scheme for developing the manufacturing resources of the country, and the United States has subsequently adopted, in one form or another, almost all of these propositions. Hamilton considered that the duties, &c., would not have to be very high or very long continued in order to accomplish their legitimate ends, after which they would become unnecessary, and would naturally be abolished. He conceded that, generally speaking, import duties were taxes on the customer, and therefore burdens-but burdens which might well be temporarily borne for the sake of the ultimate advantage arising from cheaper goods and diversities industries. He emphasized also the advantage of a home market for agricultural products, and seemed to think that the United States had to pay the cost of transportation both on the agricultural products it exported and the manufactured goods it imported. This report remained the armoury from which the protectionists drew their weapons of offence and defence for two generations, and it has not yet ceased to be the centre around which the theoretical contest is waged even to-day in Germany and France as well as in the United States.

The next great theorist in this held was the German, Friedrich List, who, while an exile in the United States, became imbued with protectionist ideas, and after doing substantial service List. . . .

for them in the country of his adoption, returned to Germany to do battle for them there. He published his National System of Political, Economy in Germany in the year 1841. It had great and immediate success, and has exercised a wide influence in Europe 0:1 theoretical discussion as well as on practical politics. List, like Hamilton, looked on protection as a temporary system designed to facilitate the passage of a country from an agricultural to a manufacturing state. He accepted free trade as generally and permanently true, but suited for actual adoption only in that cosmopolitan era towards which the world is progressing. But in order to prepare for this cosmopolitan period it is first necessary for each nation to develop its own resources in a complete and harmonious manner. A comprehensive group of national economies is the fundamental condition of a desirable world economy; otherwise there would be a predominance of one or of a few nations, which would of itself constitute an imperfect civilization. Protection is a means of educating a nation, of advancing it from a lower to a higher state. He admits that it may involve a loss, but only in the sense that money expended for an education or an educational system is a loss, or that money spent for seed corn is a loss. To the cosmopolitan system of Adam Smith, List opposes the national system as a preliminary and necessary stage. He favours the imposition of duties as the most efficient means of effecting the protection which he has' in mind. Agriculture will be sufficiently protected by the constant demand for its products. The essence of his larger work is contained in a pamphlet published in Philadelphia in 1827, entitled Outlines of American Political Economy. It is, in fact, a series of letters advocating 467

the further development of the protective system already adopted in the United States.

The third great name in the history of protection is that of Henry C.Carey, an American, in some ways the most distinguished and most inliuential of the followers of Hamilton and Carey: List. He was at first a strong free trader, then a Pattenprotectionist who believed in protection as a preparation for free trade, and finally an uncompromising advocate of protection in all circumstances and for all nations. In him and in Simon M. Patten, the last, and in many respects the ablest, of the apologists for protection, we have the theoretical development corresponding to the practical outcome of protection as a comprehensive all-embracing scheme extending protection to all branches of industry alike-agriculture, manufacturing and mining-and aiming to be permanent in its form and policy. As Patten expresses it: “ Protection now changes from a ternporary expedient to gain specific ends (such as the establishment of manufactures), to a consistent endeavour to keep society dynamic and progressive. Protection has become part of a fixed national policy to increase the value of labour with the increase of productive power, and to aid in the spread of knowledge and skill, and in the adjustment of a people to its environment.” The object of protection has now become, in the View of the theoretical American protectionist, not an approximation to European industrial conditions, but as great a differentiation from them as possible. Carey's works were translated into the leading European languages, and contributed doubtless to the spread of protectionist ideas, though the extreme form in which his views were expressed, and the rambling illogical method of exposition, repelled many who might otherwise have been attracted by the course of his thought.

Economists of other schools, with the exception of the more rigid British free traders, have allowed a relative validity to the doctrines of List; and even among older British economists, Mill and some of his disciples conceded the logical possibility of quickening the development of an industry by import duties in such a way as to result in more good than harm, though they have hardly been willing to acknowledge that it is practically possible. The modern historical school of political economists have generally admitted the reasonableness of protective policies at certain times and places, though usually linding the justification in political and social considerations rather than in economic. And while the British objections to protectionism in any form have been widely upheld by the more conservative economists in England, the new political school of “ tariff-reform and colonial preference” has found strong support at the hands of such British authorities on economics as Professors Cunningham, Ashley and Hewins, or the authors of Compatriots' Club Essays 1906 (J. L. Garvin and others), whose advocacy of a national policy recalls the work of Hamilton and List. (E. ]'. J.) Authorities.-P. Ashley, Modern Tariff History (London, 1904); W. ]. Ashley, The Tarif Problem (London, IQ04); A. 1. Balfour, Economic Notes on Insular Free Trade (London, 1903); G. Blondel, La Politique protectionist en Angleterre (Paris, 1904)i F. Bowen, American Political Economy (New York, 1875); B. Braude, Die Grundlagen und die Grenzen des Charnberlainismus: Studien zur Tarifreformbewegung im gegenwartigen England (Zurich, 1905); J. B. Byles, Sophisms of Free Trade (London, 1903); G. Byng, Protection (London, 1901); H. C. Carey, Principles of Social Science (3 vols., Philadelphia, 1858-1859), Harmony of Interests-Agricultural, Manufacturing and Commercial (Philadelphia, 1873); C. H. Chomley, Protection in Canada and Australasia (London, 1904); W. Cunningham, The Rise and Decline of the Free Trade Movement (London, 1904); G. B, Curtiss, Protection and Prosperity: an Account of T arif Legislation and its Eject in Europe and America (1896); W. H. Dawson, Protection in Germany (London, 1904); E. Duhring, Kritische Grundlegung der Volksfwirthschaftslehre (1886); Kursus der National- und Socialokonomie (1873); Dumesnil-Marigny, Les Libre-échangistes et les protectionist es conciliés (1860); Ganilh, T héorie de Féconomie politique (1822); G. Gunton, Wealth and Progress (New York, 1887); Principles of Social Economics (New York, 1891); Alexander Hamilton, Report on the Subject of Manufactures, communicated to the House of Representatives, 5th December 1791; H. M. Hoyt, Protection v. Free Trade, the scientific validity and economic operation of defensive duties in the United States (New York, 1886); E. ]. James, Studien uber den amerikanischen Zolltarzf (Jena, 1877); F. List, Das nation ale System der politischen Oekonomie (Eng. trans.