as well have referred to industry in a different department. There are tailors at Quimper, and that does not hinder there being tailors also in Paris, though the latter pay a higher rent, and live at much greater expense. But then they have a different set of customers, and that serves not only to redress the balance, but to make it incline to their side.
When we speak, then, of equalizing the conditions of labour, we must not omit to examine whether liberty does not give us what we seek from an arbitrary system.
This natural levelling power of the economic phenomena is so important to the question we are considering, and at the same time so fitted to inspire us with admiration of the providential wisdom which presides over the equitable government of society, that I must ask permission to dwell upon it for a little.
The protectionist gentlemen tell us: Such or such a people have over us an advantage in the cheapness of coal, of iron, of machinery, of capital—we cannot compete with them.
We shall examine the proposition afterwards under all its aspects. At present, I confine myself to the inquiry whether, when a superiority and an inferiority are both present, they do not possess in themselves, the one an ascending, the other a descending force, which must ultimately bring them back to a just equilibrium.
Suppose two countries, A and B. A possesses over B all kinds of advantages. You infer from this, that every sort of industry will concentrate itself in A, and that B is powerless. A, you say, sells much more than it buys; B buys much more than it sells. I might dispute this, but I respect your hypothesis.
On this hypothesis, labour is much in demand in A, and will soon rise in price there.
Iron, coal, land, food, capital, are much in demand in A, and they will soon rise in price there.
Contemporaneously with this, labour, iron, coal, land, food, capital, are in little request in B, and will soon fall in price there.
Nor is this all. While A is always selling, and B is always buying, money passes from B to A. It becomes abundant in A, and scarce in B.
But abundance of money means that we must have plenty of it to buy everything else. Then in A, to the real dearness which arises from a very active demand, there is added a nominal dearness, which is due to a redundancy of the precious metals.
Scarcity of money means that little is required for each purchase. Then in B a nominal cheapness comes to be combined with real cheapness.
In these circumstances, industry will have all sorts of motives—motives, if I may say so, carried to the highest degree of intensity—to desert A and establish itself in B.
Or, to come nearer what would actually take place under such circumstances, we may affirm that sudden displacements being so repugnant to the nature of industry, such a transfer would not have been so long delayed, but that from the beginning, under the free regime, it would have gradually and progressively shared and distributed itself between A and B, according to the laws of supply and demand—that is to say, according to the laws of justice and utility.
And when I assert that if it were possible for industry to concentrate itself upon one point, that very circumstance would set in motion an irresistible decentralizing force, I indulge in no idle hypothesis.
Let us listen to what was said by a manufacturer in addressing the Manchester Chamber of Commerce (I omit the figures by which he supported his demonstration):—
"Formerly we exported stuffs; then that exportation gave place to that of yams, which are the raw material of stuffs; then to that of machines, which are the instruments for producing yarn; afterwards to the exportation of the capital with which we construct our machines; finally, to that of our workmen and our industrial skill, which are the source of our capital. All these elements of labour, one after the other, are set to work wherever they find the most advantageous opening, wherever the expense of living is cheaper and the necessaries of life are moat easily procured; and at the present day, in Prussia, in Austria, in Saxony, in Switzerland, in Italy, we see manufactures on an immense scale founded and supported by English capital, worked by English operatives, and directed by English engineers."
You see very clearly, then, that nature, or rather that Providence, more wise, more far-seeing than your narrow and rigid theory supposes, has not ordered this concentration of industry, this monopoly of all advantages upon which you found your reasoning as upon a fact which is unalterable and without remedy. Nature has provided, by means as simple as they are infallible, that there should be dispersion, diffusion, solidarity, simultaneous progress; all constituting a state of things which your restrictive laws paralyze as much as they can; for the tendency of such laws is, by isolating communities, to render the diversity of condition much more marked, to prevent equalization, hinder fusion, neutralize countervailing circumstances, and segregate nations, whether in their superiority or in their inferiority of condition.
III. In the third place, to contend that by a protective duty you equalize the conditions of production, is to give currency to an error by a deceptive form of speech. It is not true that an import duty equalizes the conditions of production. These remain, after the imposition of the duty, the same as they were before. At most, all that such a duty equalizes are the conditions of sale. It may be said, perhaps, that I am playing upon words, but I throw back the accusation. It is for my opponents to show that production and sale are synonymous terms; and if they cannot do this, I am warranted in fastening upon them the reproach, if not of playing on words, at least of mixing them up and confusing them.
To illustrate what I mean by an example: I suppose some Parisian speculators to devote themselves to the production of oranges. They know that the oranges of Portugal can be sold in Paris for a penny apiece, whilst they, on account of the frames and hot-houses which the colder climate would render necessary, could not sell them for less than a shilling as a remunerative price. They demand that Portuguese oranges should have a duty of elevenpence imposed upon them. By means of this duty, they say, the conditions af production will be equalized; and the Chamber, giving effect, as it always does, to such reasoning, inserts in the tariff a duty of elevenpence upon every foreign orange.
Now, I maintain that the conditions of production are in nowise changed. The law has made no change on the heat of the sun of Lisbon, or on the frequency and intensity of the frosts of Paris. The ripening of oranges will continue to go on naturally on the banks of the Tagus, and artificially on the banks of the Seine—that is to say, much more human labour will be required in the one country than in the other. The conditions of sale are what have been equalized. The Portuguese must now sell us their oranges at a shilling, elevenpence of which goes to pay the tax. That tax will be paid, it is evident, by the French consumer. And look at the whimsical result. Upon each Portuguese orange consumed, the country will lose nothing, for the extra elevenpence charged to the consumer will be paid into the treasury. This will cause displacement, but not loss. But upon each French orange consumed there will be a loss of elevenpence, or nearly so, for the purchaser will certainly lose that sum, and the seller as certainly will not gain it, seeing that by the hypothesis he will only have received the cost price. I leave it to the protectionists to draw the inference.
IV. If I have dwelt upon this distinction between the conditions of production and the conditions of sale, a distinction which the protectionists will no doubt pronounce paradoxical, it is because it leads me to inflict on them another, and a much stranger, paradox, which is this: Would you equalize effectually the conditions of production, leave exchange free.
Now, really, it will be said, this is too much; you must be making game of us. Well, then, were it only for curiosity, I entreat the gentlemen protectionists to follow me on to the conclusion of my argument. It will not be long. I revert to my former
