ALLEGED BENEFITS OF A CORN-LAW:
IMPROVED HOME-MARKET, NATIONAL INDEPENDENCE.
LAST week we directed the attention of our readers to the immediate and inevitable consequences of any law prohibiting or restricting the importation of foreign corn. We showed bow the enforcing of such a law must diminish the quantity of corn, food in general, and all the other necessaries and conveniences of life. Keeping this fact steadily in view, the next step in an investigation of the practical bearing of a restrictive or prohibitive corn-law is to inquire what benefit it can confer upon a country, sufficient to counterbalance the evil of submitting to a voluntary and artificial scarcity. The arguments of the advocates of our Corn-laws naturally arrange themselves under two classes. One class, if valid, goes to establish the expediency of a restrictive corn-law in every country under all circumstances; the other only undertakes to prove that it is expedient in this country under existing circumstances. The first class consists of the allegations, that a restrictive corn-law is necessary to create a good permanent home market, and that it is necessary in order to secure national independence. The second consists of such allegations as these—that the amount of taxation in this country exceeds its amount in corn-growing countries to a degree that would operate as a bounty in favour of foreign corn ; or that the agricultural interest bear a disproportionate share of the national taxation, and are entitled to a monopoly of the home market as a set-off; or that the abolition of the Corn-laws, by diminishing rentals and increasing the value of mortgages, would ruin the landed interest. We confine ourselves at present to the. argumentsof the first class, seeing that, if valid, they are con- clusive—final in favour of a corn-law ; while the others still leave the question open, may there not be some more eligible method of attaining the end in view ? The former resemble good substantial pleas in law upon which any counsel may peril his case : the latter are more like a heap of inconclusive considerations thrown in to add weight to a weak argument.
The arguments upon which those advocates of restriction who take a comprehensive view of the subject, and, rising above the narrow considerations of class interests, look to the permanent advantage of the whole community, peril their cause, are—first, that the restrictions are necessary in order to insure a steady profitable home market to the manufacturer ; second, that the restrictions are necessary in order to render the country inde• pendent of foreign nations. I. Keeping in mind the truth which we last week demonstrated— that the effect of a restriction on the importation of foreign grain is to impoverish the whole nation, the assertion that a restrictive corn-law is calculated to improve the home market, amounts to this—that you make people better customers by making them poorer. The home market means the demand of all classes in the community. Food is the first necessary of life, and will be pur- chased at the sacrifice of every thing else. The more money is required to buy food, the less will be left to purchase other corn- modities. The law which renders food scarce raises its price, and withdraws the whole amount of the increase from the manufac- turer's home market. All the labourers of the country lay out just as much less money on doilies, furniture, and other things of that kind, as they are obliged to lay out more on food. All manufac- turers and merchants, members of the learned professions, and persons subsisting on salaries and annuities, lay out as much Snore money on clothes, furniture, &c. as they need to lay out less on food. Taking for granted that what is called agricultural Interests are benefited by the higher price of food, they too pay higher for what food they consume, and have not, after all, such clear increased means of expenditure as they flatter themselves. This way of viewing the question proceeds on the assumption that the national ability to purchase will continue undiminished by the diminished supply of food; but we showed last week, that its necessary effect was to diminish the means of purchasing food at the same time that it increased the price of that food. The higher price of food will therefore have to be deducted from a smaller sum in the possession of the pur- chasers. The inevitable consequence of a restrictive corn-law is the spoiling of the home market. Our object in these papers being to ascertain the truth, and to make it as evident as we can to all our readers, it is not enough to make out our own view of the case : we must further endeavour to show those who have arrived at a different conclusion where their mistake lies. The fallacy which has vitiated the reasoning of those who think a restrictive corn-law must improve the home market, is not difficult to discover. They look upon merchants and manufac- turers merely as persons who supply the home market : they leave entirely out of view that merchants and manufacturers are con- sumers as well as producers—that they form a very important part of the home market. They forget that a cabinetmaker buys his breeches, and that a tailor buys his tables, chairs, pots, pans, knives, and forks. When they speak of making the home market wealthier, they mean only the agricultural classes—only that por- tion of the agricultural classes whose income is increased by a rise in the price of food. They allow themselves to be misled by the use of abstract terms : they talk of those who manufacture and sell, and of those who purchase, till they argue as if these were two entirely distinct classes, forgetting that every man belongs to both. They never reflect that their cant word "home market" may be turned against themselves ; that every thing which narrows the manufacturer's or the merchant's field of profitable employment, by keeping them poorer, spoils the "home market" for agricultural produce. They forget, in their antithetical way of opposing the home market to the foreign market, that it is mainly the foreign market that makes the home market. No one country has ever had its native resources fully developed except under the stimulus of foreign trade. Dr. FRANKLIN tells a story which illustrates this position, in his own admirable homely way. A particular kind of lace cap was brought from New York to Philadelphia, which set all the heads of the young women agog to get one like it : they were all dexterous knitters, and, learning that there was a great demand for mittens and hose in New York, they set themselves to work, and soon sent considerable quantities thither for sale, in order that they might be able to purchase lace caps with the money. These young women had all along kept themselves and their families comfortably supplied with mittens and hose ; but, had not the first lace cap found its way to Phila- delphia, they never would have discovered that by a little extra exertion they could obtain other comforts and even luxuries; the mitten and hose manufacture of Philadelphia would never have been fully developed. The whole population of Philadelphia would have remained poorer by the value of all the lace caps imported. The home market of Philadelphia would have been worse supplied by the want of all those caps. What York and Philadelphia were in this case, any two nations which trade must necessarily be to each other.
It is evident from these considerations, that the idea of benefiting the home market by restrictions on the price of grain, is unreal, shadowy, and illusory. We do not need to inquire whether the good is in this case great enough to counterbalance the evil, for there is clearly no good to reckon upon.
II. It is necessary, say the advocates of our Corn-laws, to dis- courage and impede the importation of grain in order that our agriculturists may be encouraged to raise a sufficient quantity to render the nation independent of foreign supplies. The first remark upon this position is, that those who maintain the necessity of rendering the country independent of foreign na- tions for its supplies of food, do not maintain that it is necessary or even possible to render it entirely independent. Even with our present Corn-laws, there is a certain portion of foreign corn, more or less, imported into this country every year. With such a stringent corn-law as ours, there is only one way of accounting for this—that we cannot dispense with this importation even in average years. Again, it is admitted on all hands, that there are in some years deficient crops, and that on such occasions it is necessary to allow corn to be imported. When, therefore, we hear people talk of rendering this country independent of supplies of food from foreign countries, the phrase is evidently used in a comparative, not in an absolute sense—it merely means as independent as possible. The benefit which it is alleged will result from this partial inde- pendence is, that we need not dread the hostility of other nations; whereas, if we are dependent on a foreign country for a supply of food, we shall not, under any circumstances, dare to go to war with
them, lest they cut off that supply. Now war is the exceptional, peace the ordinary state of relations between any two countries : this argument goes to maintain that a nation must regulate its permanent routine transactions so as always to be ready to meet a contingent event of comparatively rare occurrence. It is as if we should advise every man to grow his own corn and bake his own bread, because he may some day have a quarrel with his farmer and baker. In order to give any weight to this warlike argument, there must be a concurrence of circumstances that is barely imaginable and scarcely possible. In the first place, the nation importing food must draw nearly the whole of its food from abroad ; in the second place, it must import just as much as it wants from day to day or from week to week; in the third place, it must import it all from one country ; and the importing country must be at war with the whole wc2Id at once. All these conditions must coexist before the one country can be rendered dependent upon the other to the extent the argument we are considering assumes. To render the dependent country unable to go to war, the other must have the power of starving it in a short time. With a country which produces a considerable proportion of its own food, as all countries with any extent of territory must do—which keeps stocks on hand, as all countries in which there is any forethought, any speculative commerce, must do—which does not go to war with the whole world at once, as few are likely to do—a war cannot reduce it to a state of famine and insurrection in a few weeks. Unless it do this, the country which supplies the food will begin to feel the weakening influence of interrupted commerce as well as the other, The dependence created between any two countries by extensive commerce is necessarily mutual : whatever be the articles ex- changed, both must suffer alike from its interruption. An unfore- seen war with a country from which we draw a large proportion of our supplies of food, would place us exactly in the same position that we would be placed in at present by an unforeseen bad har- vest, neither better nor worse. Privation, suffering, it would give rise to, undoubtedly ; but such utter prostration of national strength as is assumed by the advocates of a restrictive corn-law, is out of the question. Nor is this all. The independence of which these gentlemen speak, it must be remembered, is only comparative. A blight in the crops may at any time, according to this view, place us at the mercy of a neighbour who has corn to sell. It may be that that neighbour may treasure up a grudge against us till such an event take place. (If extreme cases are to be supposed, we have as good a right to our supposition as others.) A nation, with which we have few or no commercial transactions, might indulge in such a fit of spleen with comparatively little hazard; but a nation with which we had large and regular dealings would pause before it indulged its anger at the risk of making one-half of its merchants bank- rupts. A nation, moreover, with which we have intimate trading relations, is less likely to be hostile than one with which we have little intercourse. We have seen that the effect of a restrictive corn-law is to keep a nation poor: it is equally clear that such a jealous isolated policy is calculated to keep nations strangers to each other, and more likely to quarrel. In a quarrel between any two nations of average intelligence, the wealthier is almost sure to conquer : accumulated capital is to a nation what bottom is to a bruiser, it enables it to weary out its adversary. The consequence of a corn-law, therefore, is in the first place to expose a nation to greater risk of being engaged in war ; in the second, to diminish its power of conducting any war in which it may be involved to a prosperous issue. Independence of nations, like independence of private individuals, does not imply that they can exist without the aid of others ; it implies that their condition is such that any per- son with whom they are in the habit of dealing must be more likely than they to suffer from a quarrel. The only method where- by a nation can attain this independence, is by augmenting to the utmost its productive industry, and to that end rendering every branch of trade, and above all the trade in food, as free as possible.
This argument, drawn from an imaginary national independence, is, therefore, as shadowy and unreal as that derived from an ima- ginary improvement of the home market. It offers no advantage to counterbalance the suffering inflicted by a restrictive corn-law. There is another argument which has sometimes been advanced in favour of a corn-law, which, however, scarcely seems to require serious discussion—that it is calculated to increase the amount of home-grown agricultural produce in a country. It may do so, and yet not benefit the nation. If by making spades a man can purchase two bushels of corn for the same amount of time and labour that it would cost him to grow one, he is a fool to abandon the more pro- ductive for the less productive branch of industry. But it is not true that restrictions on the importation of foreign grain are calcu- lated to render home agriculture more productive. The removal of competition has never rendered men more industrious. It is folly to expect that a man will be induced to bring more and better wares to market by being told that he need fear no rival there. Competition is the only spur to make men work harder and better. If English agriculture has improved since 1815, this has not been owing to the exclusion of the foreign grower, but to the increasing competition of Scotch and Irish agriculturists. It appears from this review, that the ends proposed to them- selves by those who advocate a restrictive corn-law upon broad and general grounds, would prove, if attained, an addition to its direct and inevitable evil, instead of counterbalancing advantages. In our next number we will take into consideration the arguments derived from peculiarities in the existing social condition of this country for imposing and continuing our Corn-laws.
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