(T) That "A Duty may at once Protect the Native Manufacturer Adequately, and Recoup the Country for the Expense of Protecting him."
141. This is Professor Sidgwick's doctrine.[1] It has given great comfort to our protectionists because it is put forward by an Englishman and a Cambridge professor. It is offered under the "art" of political economy. It is a new thing; an a priori art. The "may" in it deprives it of the character of a doctrine or dogma such as our less cultivated protectionists give us — "Protective taxes come out of the foreigner" — but it is not a maxim of art. It has the air of a very astute contrivance (see § 3), and is therefore very captivating to many people, and it is very difficult to dissect and to expose in a simple and popular way. It has therefore given great trouble and done great mischief. It is, however, a complete error. It is not possible in any way or in any degree to use duties so as to make the foreigner pay for protection.
142. Professor Sidgwick states the hypothetical instance which he sets up to prove by illustration that there "may" be such a case, as follows: "Suppose that a five per cent duty is imposed on foreign silks, and that, in consequence, after a certain interval, half the silks consumed are the product of native industry, and that the price of the whole has risen 2½ per cent. It is obvious that, under these circumstances, the other half, which comes from abroad, yields the state five per cent, while the tax levied from the consumers on the whole is only 2½ per cent; so that the nation, in the aggregate, is at this time losing nothing by protection, except the cost of collecting the tax, while a loss equivalent to the whole tax falls on the foreign producer."
143. It is necessary, in the first place, to complete the hypothesis which is included in this case. Let us assume
- ↑ "Political Economy," 491-492.
