Chapter CXXXVIII: Section IV

FURTHER EDUCATIONAL EFFECTS OF THE INDUSTRIAL PROTECTIVE SYSTEM.

The sacrifices which the protective system directly imposes on the national wealth consist in products, fewer of which with an equal straining (_Anstrengung_) of the productive forces of the country, are produced and enjoyed, than free trade would procure. But it is possible by its means to build up (_bilden_) new productive forces, to awaken slumbering ones from their sleep, which, in the long run, may be of much greater value than those sacrifices. Who would say that the cheapest education is always the most advantageous?[A3-4-1] Only by the development of industry also, does the nation's economy become mature.[A3-4-2] The merely agricultural state can attain neither to the same population nor the same energy of capital, to say nothing of the same skillfulness of labor, as the mixed agricultural and industrial state; nor can it employ its natural forces so completely to advantage.[A3-4-3] How many beds of coal, waterfalls, hours of leisure,[A3-4-4] and how much aptitude for the arts of industry, can be turned to scarcely any account in a merely agricultural state? If, therefore, the protective system could materially promote a national industry, or if it made such industry possible, for the first time, the sacrifice connected therewith, in the beginning, should be considered like the sacrifice of seed made by the sower;[A3-4-5] but this can be justified only on the three following conditions: that the seed is capable of germination; that the soil be fertile and properly cultivated, and the season favorable.[A3-4-6] [A3-4-7]

[Footnote A3-4-1: _List_, Nationales System der polit.
Oekonomie, kap. 12, contrasts two owners of estates, each of
whom has five sons, and can save 1,000 thalers a year. The
one brings his sons up as tillers of the ground (_Bauern_ =
peasants) and puts his savings out at interest. The other,
on the contrary, has two of his sons educated as _rational_
(_rationelle_) agriculturists, and the others as intelligent
industrial workers, and at a cost which prevents the
possibility of his accumulating any more capital. Which of
the two has cared better for the standing, wealth, etc. of
his posterity; the adherent of the "theory of exchangeable
values" or the adherent of the doctrine of "the productive
forces?"]

[Footnote A3-4-2: The rent of the land of Gr. Botton, in
Lancashire, was estimated in 1692 at £169 per annum; in
1841, at £93,916. (_H. Ashworth._)]

[Footnote A3-4-3: The pottery district of Staffordshire was
formerly considered very unfertile. It was industry that
first showed how the rich and varied beds of clay at the
surface, and the wealth of coal under them, could be fully
utilized.]

[Footnote A3-4-4: Blind free-traders always like to assume
that every man capable of working always busies himself;
whereas idleness frequently excuses the wasting of its time,
by the plea that a remunerative market of the possible new
products is improbable, or at least uncertain. Compare _J.
Möser_, P. Ph., I, 4. _Kröncke_, Steuerwesen (1804), 324,
328 seq., and even the first German reviewers of Adam Smith
in _Roscher_, Gesch. der N. Oek. in Deutschland, II, 599.]

[Footnote A3-4-5: _List_ calls attention to the case of the
stenographic apprentice who writes more slowly for a time
than he was wont to formerly.]

[Footnote A3-4-6: Let us suppose that a country had hitherto
produced $10,000,000 worth of corn, and that of this amount
it had sent $1,000,000 worth into foreign countries as a
counter-value for foreign manufactured articles. It now, by
means of a protective tariff, establishes home manufactures,
through the instrumentality of which a coal bed or water
fall is turned to account. The workmen in the manufactories
henceforth consume what was formerly exported. Of course
such a change is not effected without loss; but this loss
ceases as soon as the home industry becomes the equal of the
foreign industry which was crowded out. And then the forces
which have been made useful in the meantime appear as clear
gain. _List_ not unfrequently called special attention to
the fact that a consumption of 70,000 persons engaged in
home industries means as much to German agriculture as all
that it exported to England from 1833 to 1836.
(Zollvereinsblatt, 1843, No. 5.)]

[Footnote A3-4-7: _Adam Smith's_ free-trade doctrine has
always been contradicted in Germany. Even in 1777, his first
great reviewer, _Feder_, says that many foreign commodities
can be dispensed with without damage; and that industries
which indemnify the undertakers of them only after a time
but which are then very useful to the community in general,
would not be begun always without special favor shown them.
(_Roscher_, Geschichte der National Oekonomie, II, p. 599.)
_Kröncke_, Steuerwesen, 324 ff., speaks of attempts towards
the education of industries by taxation-favors: "If of ten,
only one succeeds, even that is to be considered a great
gain." But modern protectionists base themselves chiefly on
their interest in the independence of the country, precisely
as the free-traders do on that of individual freedom. _Ad.
Müller_, with his organic way of comprehending things,
opposes the assumption of a merely mercantile world-market,
in which all the merchants engaged in foreign trade
constitute a species of republic. (_Quesnay._) He also
rejects on national grounds the universal freedom of trade
as well as the universal empire akin to it; although as a
means of opposing it, he suggests not so much a protective
tariff as the intellectual cultivation of nationality in
general. (Elemente der Staatskunst, 1809, II, 290, III, 215,
II, 240, 258.) According to _Sörgel_ (Memorial an den
Kurfürst v. Sachsen, 1801,) commercial constraint
(_Handelszwang_), by means of export and import duties, is
useful in the childhood of manufactures, afterwards
injurious, because the powerful incentive to perfection is
wanting where no competition is to be feared (67). _P.
Kaufmann_, the opponent of Smith's balance-theory, demands
moderate protection against the otherwise irresistible
advantages to already developed industrial nations.
(Untersuchungen, 1829, I, 98 ff.) The principal advocate in
this direction is _Fr. List_, with a great deal of sense for
the historical, but with little historical erudition; and
after the manner of an intelligent journalist, he reproaches
the free-trade school with baseless cosmopolitanism, deadly
materialism, and disorganizing individualism. He
distinguishes in the development of nations five different
stages: hunter-life, shepherd-life, agriculture, the
agricultural-manufacturing period, the
agricultural-manufacturing-commercial period; and he demands
that the state should lend its assistance in the transition
from the third to the fourth stage, in the nursing or
planting of manufacturing forces in connection, throughout,
with the enfeebling of feudalism and bureaucracy, the
increase of the middle class, with the power of public
opinion, especially of the press, the strengthening of the
national consciousness from within and without. Compare
_Roscher's_ review in the Gött. gelehrten A. 1842, No. 118
ff. As to how List resembles, and differs from Ad. Müller,
see _Roscher_, Gesch. der N. O., II, 975 ff.; _von Thünen's_
independent defense of a protective tariff; Isolirter Staat,
II, 2, 81, 92 ff., 98; Leben, p. 255 seq. The socialist
_Marlo_ (Weltökonomie, I, ch. 9, 10) distinguishes common
products (_Gemeinprodukte_) which may be obtained equally
well in every properly developed country, and peculiar
products (_Sonderprodukte_), like coffee, wine, etc. With
respect to the former, he agrees with List; in regard to the
latter, with Smith. A protective tariff exerts a constraint
on consumers, compelling them to abridge their enjoyments
somewhat, and to employ these now in the procuring of
instruments of production, in the exercise of skill needed
in production and the accumulation of capital. At the same
time foreigners should be kept from utilizing home natural
forces, and where possible, home manufactures should be
helped to utilize foreign natural forces. _Marlo_, indeed,
assumes, as one-sidedly as the followers of Smith do the
contrary, that without the tariff the workmen in question
would not be employed at all; but he is right in this, that
the most fruitful employment of the forces of labor, and the
keeping of them most completely busy, mutually replace each
other. In France, even _Ferrier_, Du Gouvernement considéré
dans ses Rapports avec le Commerce (1808), had defended the
Napoleonic continental system. See _Ganilh_, the French
List, Theorie de l'Economie politique (1822), who grades the
branches of a nation's economy in a way the reverse of Adam
Smith, and finds the protective system necessary for the
less developed nations, to the end that they may not be
confined to the most disadvantageous employments of capital
(II, p. 192 ff.). Especially is a greater population made
possible in this way (248 ff.). Similarly, _Suzanne_,
Principes de l'E. polit., 1826. Further, _H. Richelot_,
List's translator. _M. Chevalier_, who recommends free trade
for France in our day so strongly, approves the system of
Cromwell and Colbert for their own time, and for a long time
afterwards (Examen du Système commercial, 1851, ch. 7): a
view which _Périn_ says is now shared by "all serious
writers." (Richesse dans les Sociétés Chrétiennes, 1861, I,
p. 510.) _Demesnil-Marigny_, Les libres Échangistes et les
Protectionistes conciliés (1860), bases his protective
system on this, chiefly, that it may greatly enhance the
money-value of a nation's resources to the detriment of
other nations, especially by the transformation of
agricultural labor, estimated in money, into the much more
productive labor of industry. The value in use of all the
national resources is doubtless greatest where full freedom
of trade obtains. In Russia, _Cancrin_ demands that every
nation should be to some extent independent in respect to
all the chief wants to the production of which it has at
least a middle (_mittlere_) opportunity; especially as all
civilization, even the higher development of agriculture,
must proceed from the cities. (Weltreichthum, 1821, 109 ff.
Oekonomie der menschlichen Gesellschaften, 1845, 10, 235 ff.)
America's most distinguished protectionist is _Hamilton_,
Report on the Subject of Manufactures presented to the House
of Representatives, December 5, 1791. _Jefferson's_ saying,
that the industry should settle by the side of agriculture,
leads us to _Carey_, who repeats the same idea with wearying
unwearisomeness; at first for the reason that the "machine
of exchange" should not be allowed to become too costly; but
afterwards rather from the Liebig endeavor to prevent the
exhaustion of the soil. He describes, indeed, how the East
Indian producer and consumer of cotton are united with one
another by a pontoon bridge which leads over England.
(Principles of Social Science, I, 378.) A good soil and good
harbors are the greatest misfortune for a country like
Carolina if free trade prevails, because it is turned into
an agricultural country (I, 373). The people who, after the
manner of the Irish, gradually export their soil, will end
by exporting themselves. _Carey_ would force colonies to
demean themselves like old countries from the first. If corn
be worth 25 cents in Iowa, and in Liverpool $1, for which 20
ells of calico are brought back, the Iowa farmer receives of
this quantity about 4 ells. Hence it would be no injury to
him were he to supply his want of cotton from a neighbor who
produced it at a cost four times as great as the Englishmen.
Analogies drawn from natural history, as, for instance, that
every organism, the lower it is in the scale of existence,
the greater is the homogeneity of its several parts; also a
deep aversion for centralization, and hatred of England,
coöperate in _Carey's_ recommendation of the protective
system, often called in the United States the "American
system," in opposition to the "British," advocated by
Webster against Calhoun and Clay against Jackson. _John
Stuart Mill_, Principles, V, ch. 10, 1, allows a protective
tariff temporarily, "in hopes of naturalizing a foreign
industry in itself perfectly suitable to the circumstances
of the country." Peel's colleague, G. Smythe, said, in 1847,
at Canterbury, that as an American (citizen of a young
country) or as a Frenchman (citizen of an old country with
its industry undeveloped), he would be a protectionist.
(Colton, Public Economy, p. 81.) Even _Huskisson_ admitted,
in 1826, that England in the seventeenth century had been
very much advanced by its protective system; and that he
would continue to vote even now for its maintenance, if
there were no reprisals to fear.]