Problems of Empire/Is Free Trade the Right Policy for this Country to-day (1898)?
IS FREE TRADE THE RIGHT POLICY FOR THIS COUNTRY TO-DAY?
The following Memorandum was written in 1898 for the consideration of a distinguished Statesman.
While admitting that Free Trade, as conceived by Cobden, is in theory perfectly sound, I believe there are grave reasons for doubting whether it is the right policy to-day, from an Imperial point of view, or even from that of the United Kingdom.
Free Trade as it has affected Ireland.1. The reduction in the population of Ireland from over eight millions in 1851 to under 4¾ millions in 1891 seems to show that Free Trade has not been beneficial to Ireland. The trade policy of Great Britain was governed by her own selfish interests, and without regard to those of Ireland in past centuries. Has it not been the same in the century now drawing to its close?
Decline in the agricultural population.2. The shifting of population from agricultural to urban districts has been due partly to the opening up of virgin soils all over the world, partly to the cheapening of the means of communication, but also in large measure to Free Trade. The decline in the agricultural population must entail in time a decline in the strength of the race; for it is from the agricultural population that the best fighting material is drawn and the urban population recruited. Mr. C. Booth tell us that in three generations a family in London becomes extinct.
Food supply in case of war.3. The danger to which our food supply would be exposed in case of war has produced a considerable agitation for the establishment of national granaries. The enormous cost involved, the fact that the State would beome a buyer and seller on a large scale, and would be prevented by public opinion from selling at a profit, and often compelled to sell at a loss, are fatal objections to the proposal. Our food supplies on the high seas can, and must be, protected by a powerful Navy. But is it not certain that Russia would, in the event of war with us, knowing how vital her corn is to our existence, lay an embargo on the export of corn? A Government like that of Russia would disregard the suffering entailed on the unfortunate grower. Similar action might be taken by the Government of the United States, though war with the United States is a contingency no Englishman cares to contemplate. We would certainly face war with greater equanimity if a larger proportion of our food supply were produced under the British Flag.
Race degeneracy.4. The steady increase in our imports, which represent the earnings of British ships and the interest on British investments abroad, the large annual savings of capital show that every year a larger proportion of our people are living on accumulated wealth, a fact which surely must tend to a decline in the strength of the race.
British industry.5. The decline or absence of growth in our export trade is no doubt due partly to the inefficiency of British merchants, as described in the Consular reports, partly to labour disputes, partly to the decline in the relative efficiency of the British manufacturer and the British workman. That we are being beaten, even in our own markets, by goods produced in highly protected countries, goods in which we have long held a pre-eminent position, at any rate shows that Free Trade is not essential to cheapness of production. The recent advance of the United States is owing undoubtedly to a great extent to her natural resources, but even more to the energy of her people, which has certainly not been hampered by Protection, as Free Traders would argue it ought to have been. On the other hand, I no more think that the industrial progress of the United States can be advanced as a positive argument for Protection than that the greater relative progress of Free Trade New South Wales, as compared with Protectionist Victoria in the last few years, can be urged as an argument in favour of Free Trade. The progress of New South Wales has been due to her greater natural resources and the superiority of the administration of some of her public departments, notably her railways under Mr. Eddy. The general conclusion seems to be that the growth of British commerce, the enormous progress in material prosperity during the fifty years from 1840-1890, are not so much due to the adoption of Free Trade as is generally asserted, and that the greater relative growth of the trade of other industrial nations in the last decade has certainly not been hindered by Protection.
Imperial Preference.6. Finally we come to the Imperial point of view, which in many ways is the most important of all. Our Colonies have grown rapidly during the present century, though the rate of growth is getting slower; but what would their growth be in the next century if their productions were given an advantage in British markets? The flow of emigration would be diverted from the United States and the Argentine Republic to Canada, to Australia, or South Africa; and in the great struggle which is to come in the not far distant future we shall need all the strength we can muster under the British flag. In a period when trade is less prosperous than it is now, a period which will probably commence about the time that the next Government comes into office, a demand is certain to be made for a reduction in the expenditure on the Navy and Army. The burden of defending our great Empire will in fact become too heavy to be borne by the taxpayers of these small islands alone. As our Colonies increase in wealth and importance, and when they do not need so large a proportion of their resources for the development of their territory, they must bear their fair share of the burden. How is this to come about?
Mr. Hofmeyr's proposal.Nearly twelve years ago I spent a long day at the Cape with Mr. Hofmeyr, then just back from the first Colonial Conference, where he had advocated his now nearly forgotten proposal, that every part of the Empire, preserving its existing tariff against Imperial goods, should over and above that, impose a differential duty of five per cent. against non-Imperial goods, the proceeds of this duty to be devoted to the maintenance of the Imperial Navy. Mr. Hofmeyr's proposal seems to me to contain the germs of the policy which is needful for the Empire to-day, viz., Preferential Trade within the Empire.