FREE TRADE AND THE WAR.
/hHER.E seems to be a lingering doubt and anxiety in the minds of some of the more extreme Tariff Reformers that somehow or other Free Traders, however patriotic in intention, would, if they could have their way, throw away the fruits of victory (if and when we obtain them) by insisting on a pedantic adherence to the principles of economic science. As convinced Free Traders, we can assure them that they need feel no such dread. It is only because Tariff Reformers have never taken the trouble to understand the Free Trade case, but have always insisted upon putting up a man of straw, calling it Free Trade, and then knocking it down and trampling upon it that they can have arrived at the idea that the Free Trader is bound to be less a lover of his country and less a maintainer of its rights than the Tariff Reformer. What the Free Trader has always said, and what remains as true now as it was /hHER.E seems to be a lingering doubt and anxiety in the minds of some of the more extreme Tariff Reformers that somehow or other Free Traders, however patriotic in intention, would, if they could have their way, throw away the fruits of victory (if and when we obtain them) by insisting on a pedantic adherence to the principles of economic science. As convinced Free Traders, we can assure them that they need feel no such dread. It is only because Tariff Reformers have never taken the trouble to understand the Free Trade case, but have always insisted upon putting up a man of straw, calling it Free Trade, and then knocking it down and trampling upon it that they can have arrived at the idea that the Free Trader is bound to be less a lover of his country and less a maintainer of its rights than the Tariff Reformer. What the Free Trader has always said, and what remains as true now as it was before the war, is that if your object is to get rich as quickly as possible, and to give both Capital and Labour the greatest possible amount of remuneration for their services, you must have the greatest possible amount of Free Trade i —you must, that is, encourage exchanges in every way, and must move economically along the line of least resistance. All Free Traders, however, whose opinions are worth having, have always admitted that to get rich quick—an object which, we may remark, is generally preached by the Protectionists who denotince underselling by the foreigner and clamour to keep work and capital at home—is not the only object to be considered, and that there may be a good deal to be said, in theory at any rate, for the " state of siege " argument. The argument is one under which a nation definitely chooses to limit exchanges, and to proceed upon the line, not of least economic resistance, but rather its opposite, in order that certain trades essential to the prosecution of war or to the national safety may be practised at home. Again, Free Traders have always admitted that, owing to the unwillingness of the working man to submit to direct taxation, it may, when you have to raise huge amounts of money by taxation, in practice, if not in theory, be absolutely necessary to raise them by'some form of tariff. But when once your general tariff for revenue is imposed, the case for the Colonial preferentialist is conceded. The Tariff Reformer on Imperial grounds and the convinced Free Trader here become confederates. Though their economic philosophies may differ, their practical aims become the same. The Tariff Reformer, in wishing to take off taxes on a particular type of goods in order to benefit the Colonies, is a practical Free Trader, and can work with the men to whom any relaxation of the tariff is good, since it means a certain amount of approach to the ideal of non- interference with exchanges. Putting on a tariff in order to take it off again in the case of the oversea parts of the Empire may be anathema to the Free Trader, but when once the tariff is on he will be quite willing to take it off piecemeal. Free Trade with the world may be his ideal, but Free Trade with half the world is better than Free Trade with nobody.
In view of these facts, we see no reason why the unity of purpose which now happily is to be found throughout the nation, and which animates Free Traders and Tariff Re- formers equally, should not be maintained even when the guns have ceased to fire. Having regard to what has happened during the war, we shall all be prepared to give most careful consideration to pleas, not only for making the nation self-supporting in the necessaries of war, but in trades which, to use a phrase of mediaeval philosophy, come under the heading of causa causans or sine qua non trades, as, for example, dye-stuffs. The war has taught us that we must not again run the risk of leaving such trades in the hands of potential enemies. Next, we are all agreed that taxation must be imposed upon a broader basis than it is at present, that therefore we shall have to have further recourse to indirect taxation, and that this indirect taxation will in all human probability have to take the form of a general tariff for revenue purposes. It is no good to pretend that this will not be a deep disappointment to many Free Traders, and must be viewed by them as an economic injury ; but to say that is only to recognize the great economic evils of the war, and the immense damage to civilization done by those enemies of the human race, the military and Junker castes of Prussia and the German Empire. Curiously enough, in essentials, though not in appearance, the Protectionists will probably find as much to disappoint them as the Free Traders in a tariff for revenue. When the aim of a tariff is to collect revenue, it cannot also be used to keep out goods. The Protectionist has therefore little use for a tariff which is a good tax-gatherer—which lets in the enemy's products even though they have to pay at the gate. So far the force of circumstances would seem to have brought about something like national agreement on the fiscal question, though it may be an agreement like that described in The Hunting of the Snark. When those who had quarrelled on the ship were moving along a narrow path on shore, they had to keep together- " Till merely from nervousness, not from goodwill, They marched along shoulder to shoulder."
There will, we believe, be no less practical agreement in regard to what we may call the belligerent side of our economic policy. The course of the war has shown us that the Germans prepared for war and waged war quite as much by economic and commercial instruments as by horse, foot, and artillery. They deliberately formed a conspiracy to secure possession of certain trades in certain areas, on the ground that the control of the industries indicated would help them to hamper us in the prosecution of war. Here there will be universal agreement on the lines of " Never again." Even though we may suffer economi- cally thereby, we must take a leaf from the German book, and see to it that German capital does not have the finger in our commercial pie that it had before, and also, if possible, that it has no finger in the pie of Powers likely to be allies of the British Empire. When the war is over we must take care that Italy, Russia, and the Balkans and Turkey, or whatever may be the State which is to succeed to the heritage of the Ottoman clan in the East, shall not be left as a happy hunting-ground for German com- mercial enterprise which moves with an illustrated catalogue in one hand and a machine gun in the other.
But though we shall all be agreed as to this, we must enter a caveat against the danger of going too far in the matter of " downing " German trade. We must never forget that the great need, when the war is over, will be to rope in all the industrial forces of the world to restore commerce. We shall want all the hands and all the brains of Europe set going to make good the loss and damage that have taken place owing to the war. The world, however much it may desire to punish Germany and Austria, literally cannot do without the help of German industrial energy. We may very possibly be able to assign them the least lucrative and the hardest tasks in the work of reconstruction, but it is a delusion to imagine that commercially and indus- trially they can be left out of the account and sterilized. No doubt a good many keen haters of the Germans, people whose point of view we quite understand, will feel indignant at our words. Yet there is a consideration which we think will prove to them very easily that we are not speaking without the book. Everybody is agreed that if Germany and Austria are conquered—we are superstitious enough to be afraid to talk about conquest till we have achieved it— they will have to pay very large indemnities to make good the harrying of Belgium, of Northern France, of Serbia and Montenegro, of Poland and portions of Russia. How would it be possible for them to pay those indemnities if they were not admitted into the work circle of Europe, but were placed under a commercial ban which sterilized their forces ? You cannot mulct a firm in heavy damages for injury done to rival traders, and at the same time forbid them to make the money out of which alone they can pay the said damages. Germany and Austria must be fined, bUt we must set them to work to pay that fine, not form schemes for sterilizing their industrial activities.
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