WHY ARE FOREIGNERS PROTECTIONISTS?
-" IF all the Cobden Club preaches is true, how does it happen that all the nations of the earth are devoted -to Protection ?" That is a question which the plain man finds a very great stumbling-block when be begins to consider the problem of free exchange. I grant,' he says to the zealous Cobdenite, that all you say sounds perfectly reasonable and true, and. intellectually I am .convinced. Still, it seems to me rather a strong order to say that we are the only nation on the face of the earth that has got any sense. If the Free-trade arguments are really as good as they sound, would they not have been perceived by other people besides ourselves ? We obviously have not got a monopoly of logic and common- sense in other matters, and it is rather puzzling to see why we should have one in regard. to economic subjects. Is'nt it, therefore, possible that there is some flaw in the Free-trade argument which we are not clever enough to see ? After all, that seems as likely a hypothesis as the other,—namely, that all foreigners, and even our own flesh and blood in America and. the Colonies, are fools, and we who inhabit this little island the only wise men on the face of the earth. If there is anything in securus judicat orbis terrarum, and there must be a good deal in it, Free-trade stands to lose.' In other words, the ordinary man is a good deal frightened and puzzled, and his faith perceptibly weakened, by the thought that perhaps after all he is pursuing a hidden fallacy. This being so it is worth while to consider why it is that almost all foreign nations are given over to Protection. If it is because they have really convinced themselves that Protection is the best means of increasing the national well-being, then no doubt the doubts and difficulties of the plain man which we have described hold the field. If, however, it can be shown, as we believe it can, that foreign Powers are, when we reach the ultimate cause, Protectionists for very different reasons, the plain man's "blank misgivings" ought to cease, determine, and be- come of no effect.
We believe that the true reason why foreign Govern- ments are Protectionist is a very simple one. The ex- planation is to be found in two facts,—(1) that they are obliged by reason of their expenditure on armaments and other phenomena of government to raise vast sums of money, and (2) that the populations of all countries outside England have a profound detestation of direct taxation. But if money has to be raised, and you cannot raise it by direct taxation, you must get it by tariffs. Foreign Governments, then, are obliged to have high tariffs. But given high tariffs as a fiscal necessity, you cannot well help adopting the principle of Protection. Taxes are, generally speaking, odious to the whole community. It is, how- ever, a peculiarity of protective taxation that there are always a large number of people ready not merely to endure it, but to support it with enthusiasm. No one was ever known to be enthusiastic over the Income-tax, but men, especially those who own land, will wax lyrical over a duty on corn, and burst into odes on the waving corn-fields, and the smiling homesteads called into exist- ence by "five shillings a quarter" on foreign wheat. Again, a tax on foreign butter and foreign beef is a source of pastoral thanksgiving to those who own and tend the cattle on a thousand hills. It is true that the consumer of corn, beef, and butter has money taken out of his pocket by the protective duties on these articles, but if the imposition is judiciously made he can be fairly easily persuaded that he does not really feel the tax, and that it is the foreigner who is paying. Indeed, he can often be induced to believe that even he will indirectly benefit. " If you will only let the farmer live, and he can't live without a little Protection, he will be able to buy your boots and cutlery, to travel on your railways, and to drink your beer. If, however, you kill him, you will lose your best customer." This sort of argument has a great effect, and. hence half the non- agricultural consumers may be induced to acquiesce in a Protection which they do not share. But in most cases they do share it. A general tariff is pro- duced which is regarded as a "dreeping roast" by all classes. So many people, directly or indirectly, appear to be protected. that every one is satisfied, or at any rate no one heeds the outcry of the few who realise that they are going to pay 20 per cent. more than they need for every- thing they use. The result is that taxation with a protective intent, instead of being unpopular, actually becomes popular, and the Finance Minister when he keeps on an old tax or puts on a new one which helps a native industry finds himself a popular hero. If Mr. McKinley had raised the millions raised under his Bill by direct taxation he would. have been execrated as a man worse than Empson or Dudley. As it is, he is the most popular man in the Union, and will in all probability be chosen President of the United States. No one speaks of him as having wrung money from the people, and his proudest boast is to have given his name to the greatest instrument of taxation that the world. has ever seen. Under these cir- cumstances can we wonder that foreign Governments love Protection, and. that, logic or no logic, they never dream of abandoning it ? Practically, then, indirect taxation means Protection, for no one will propose unpopular measures when he can quite as easily propose those which are popular. As we have said, then, the reason why foreign nations adopt Protection is their unwillingness to bear direct taxation. Why they will not endure any great amount of direct taxation is another story, and one which we cannot attempt to discuss here. It is sufficient for our present purpose to note the fact. It will perhaps be asked how it comes about that English Governments have been able to avoid yielding to the temptation to raise the vast sums of money required. by the Treasury by giving up Free-trade. That they have not chosen the primrose path of Protection is, we believe, ultimately due to the plain and simple fact that the soil of England cannot grow enough food to supply her people. Hence the protection of agriculture is practically barred by the force of circumstances. But that part of our population which is connected with the land is a very important one, and very powerful politically. Hence it would be im- possible to give Protection to other industries and not to farming. This is the physical reason against the adoption of Protection in England. Another, of a moral kind, is to be found in the fact that our statesmen and our popula- tion generally are better versed in economic and political problems than those of foreign countries, and that a large part of them have fully realised that a great waste of wealth is involved in Protection, and that a waste of wealth is bad for the nation. But no man who has grasped these two facts can be a Protectionist. Hence reason comes to the support of expediency in forbidding us to give up Free-trade. If conditions similar to those which obtain here were to exist on the Continent, in America, or in the Colonies, we have little doubt but that the minds of the statesmen and of the people in general would become open to the principles of Free.trade. As it is, however, they have little temptation to trouble about the matter. All the temptation is, indeed, the other way. While they can enjoy a system of taxation which raises vast sums, and yet is not unpopular, why on earth should they trouble their heads about the principles of Free-trade ? When the necessity arises they will look into the arguments, but not till then. 'Whether the necessity will arise in our time remains to be seen. Protection is, of course, a form of bleeding to death, but it is a very slow form, and it is quite possible that the exhaustion which must come in the end will be postponed for another generation. In any case, the dread that they are trying a dangerous path all alone, and contrary to the opinion of the rest of the civilised world, need not really trouble our weaker brethren here. The Continent is Protectionist not because it is convinced, but merely because, under the circumstances, Protection is the only way open to it of raising the millions it requires for the Army and Navy, the administration, and public works.
Previous page
