THE GRAMMAR OF FREE-TRADE.

MTariff R. BALFOUR'S speech to the Women's Tari Reform League was an extraordinary performance. It may not on reflection prove altogether satisfactory to the Tariff Reformers and Protectionists, for it had a. somewhat lukewarm temperature, but at the same time it would seem to show that he has no grasp whatever of the principles of Free-trade, and does not realise, or at any rate is anxious to pretend that he does not realise, the Free- trade case, and why people like ourselves hold Free-trade views and dread Protection under any of its aliases as likely to waste and progressively diminish the wealth of the country. That being so, we feel that it may be worth while to put once again the Free-trade case, and to show Mr. Balfour, not of course with any hope of converting him, what remains to be answered in that case, but what he has never made any attempt to answer. But perhaps Mr. Balfour would think it below him to notice the opinion of a mere newspaper writer. Instead, then, of putting the case in our own words, we will put it in these of Bastiat,—the greatest writer who has ever dealt with economic subjects, the man who expounded better and more lucidly than any one before or since his time the essential doctrine of political economy, the doctrine of exchange.

Bastiat pointed out that there are only two ways in which a nation can obtain a commodity which it desires. Either it must make it for itself, or else make something. else which it can exchange for that commodity. [The use of money to purchase commodities is only exchange one step removed, or rather exchange expressed in the absolute rather than in the particular form.] Which of these two ways the nation should choose must depend upon which is the line of least resistance,—that is, whether it is easier for a particular country to make the thing itself, or to make the thing to be exchanged for it. And here, as Bastiat insisted, the attempt of the Government to decide by enjoining one course through the instrument of taxation or prohibition is unwise. The individuals concerned, if left to themselves, will always make the best choice. But Bastiat's argument was apt to be couutered by those who declared that he had missed the point because he looked at matters too much from the consumer's point of view, and too little from that of the producer. This, again, Bastiat met by the declaration that the bulk of mankind are both consumers and producers, and that the question must be studied from the point of view of the consumer-producer. And then, with that illuminating wit which he knew so well how to use, he recalled the desert island of Robinson Crusoe, in which the State consisted of one man, who com- bined in himself all the consumers and all the producers of the nation.

Bastiat's unrivalled exposition of Free-trade from the point of view of Robinson Crusoe must be given in his own words. Incidentally, or rather by way of preface, he destroys the fallacy that the economic object of man is to find. work, and that work, the obstacle to abundance, not abundance, should be our ideal :- " You remember how Robinson Crusoe managed to make a. plank when he had no saw ?

Yes; he felled a tree, and then, cutting the trunk right and loft with his hatchet, he reduced it to the thickness of a board.

And that cost him much labour P Fifteen whole days' work.

And what did he live on during that time P He had provisions. What happened to the hatchet P It was blunted by the work. Yes; but you perhaps do not know this: that at the moment when Robinson was beginning the work ho perceived a plank thrown by the tide upon the seashore P Happy accident I he, of course, ran to appropriate it P That was his first impulse ; but he stopped short, and began to reason thus with himself :-

' If I appropriate this plank, it will cost me only the trouble of

carrying it, and the time needed to descend and remount the cliff.

But if I form a plank with my hatchet, first of all, it will procure me fifteen days' employment; then my hatchet will get blunt, which will furnish me with the additional employment of sharpening it ; then I shall consume my stock of provisions, which will be n third source of employment in replacing them. Now, labour is wealth. It is clear that I should ruin myself by appropriating the shipwrecked plank. I must protect my personal labour ; and now that I think of it, I can oven inorease that labour by throwing the other plank into the sea.'

But this reasoning was absurd. No doubt. It is nevertheless the reasoning of every nation which protects itself by prohibition. It throws back the plank which is offered it in exchange for a small amount of labour in order to exert a greater amount of labour. It is not in the labour of the Custom-house officials that it discovers a gain. That gain is represented by the pains which Robinson takes to render back to the waves the gift which they had offered him. Consider the nation as a collective being, and you will not find between its reasoning and that of Robinson an atom of difference."

Could the argument against the policy of treating " dumping " as a crime, or at any rate a disaster, be better put than here ? It makes no difference whether the sea " dumps " the produce of the carpenter—i.e., trimmed planks—on our shore or the foreigner. Both processes have the same results as far as the consumer and. the home producer are concerned. We must, how- ever, continue Bastiat's argument :— " Did Robinson not see that he could devote the time saved to something else ?

What else?

As long as a man has wants to satisfy and time at his disposal, there is always something to be done. I am not bound to specify the kind of labour he would in such a case undertake.

• I see clearly what labour he could have escaped.

And I maintain that Robinson, with incredible blindness, con- founded the labour with its result, the end with the means, and I am going to prove to you . . .

• There is no need. Here we have the system of restriction or prohibition in its simplest form. If it appear to you absurd when so put, it is because the two capacities of producer and consumer are in this case mixed up in the same individual."

Bastiat next proceeds to make Robinson Crusoe the means of illustrating the principles of Free-trade from another point of view. Here, however, he takes a more complicated example than that of the isolated consumer-producer, and we are given in a delightfully humorous fable the true principles of international trade :- "Some time afterwards, Robinson having met with Friday, they united their labour in a common work. In the morning they hunted for six hours, and brought home four baskets of game. Iu the evening they worked in the garden for six hours, and obtained four baskets of vegetables.

One day a canoe touched at the island. A good-looking foreigner landed, and was admitted to the table of our two recluses. Ho tasted and commended very much the produce of the garden, and before taking leave of his entertainers spoke as follows :-

`Generous islanders, I inhabit a country where game is much more plentiful than bore, but whore horticulture is quite unknown. It would be an easy matter to bring you every evening four baskets of game, if you would give me in exchange two baskets of vegetables' • At those words Robinson and Friday retired to consult, and the argument that passed is too interesting not to be reported in eztenso :— FRMAY. What do you think of it P ROBINSON. If we close with the proposal we are ruined. F. Are you sure of that? Let us consider.

R. The case is clear. Crushed by competition, our hunting as a branch of industry is annihilated.

F. What matters it if we have the game?

R. Theory ! It will no longer be the product of our labour.

F. I beg your pardon, Sir ; for in order to have game we must part with vegetables.

R. Then what shall we gain P F. The four baskets of game cost us six hours' work. The foreigner gives us them in exchange for two baskets of vegetables, which cost us only three hours' work. This places three hours at our disposal.

R. Say, rather, which are subtracted from our exertions. In this will consist our loss. Labour is wealth, and if we lose a fourth part of our time, we shall be less rich by a fourth.

F. You are greatly mistaken, my good friend. We shall have as much game, and the same quantity of vegetables, and three hours at our disposal into the bargaiu. This is progress, or there is no such thing in the world.

R. You lose yourself in generalities! What should we make of these three hours?

F. We would do something else.

, R. Ah! I understand you. You cannot come to particulars. Something else, something else—this is easily said. F. We can flab, we can ornament our cottage, we can read the Bible.

R. Utopia! Is there any certainty that we should do either the one or the other ?

F. Very well, if we have no wants to satisfy, we can rest. Is repose nothing ?

R. But while we repose we may die of hunger. F. My dear friend, you have got into a vicious circle. I speak of a repose which will subtract nothing from our supply of game and vegetables. You always forget that by means of our foreign trade nine hours' labour will give us the same quantity of pro- visions that we obtain at present with twelve.

R. It is very evident, Friday, that you have not been educated in Europe, and that you have never read the Moniteur Industriel. If you had, it would have taught you this: that all time saved is sheer loss. The important thing is not to eat or consume, but to work. All that wo consume, if it is not the direct produce of our labour, goes for nothing. Do you want to know whether you are rich ? Never consider the satisfactions you enjoy, but the labour you undergo. This is what the Moniteur industriet would teach you. For myself, who have no pretensions to be a theorist, the only thing I look at is the loss of our hunting.

F What a strange conglomeration of ideas! but . . .

R. I will have no buts. Moreover, there aro political reasons for rejecting the interested offers of the perfidious foreigner. F. Political reasons !

R. Yes, he only makes us these offers because they are advan- tageous to him.

F. So much the better, since they are for our advantage like- wise.

R. Then by this traffic we should place ourselves in a situation of dependence upon him.

F. And he would place himself in dependence upon us. We should have need of his game, and he of our vegetables, and we should live on terms of friendship.

R. System! Do you want me to shut your mouth ?

F. We shall see about that. I have as yet hoard no good reason.

R. Suppose the foreigner learns to cultivate a garden, and that his island should prove more fertile than ours. Do you see the consequence ?

F. Yes; our relations with the foreigner would cease. He would send us no more vegetables, since ho could have them at home with less labour. He would take no more game from us, since we should have nothing to give him in exchange, and we should then be in precisely the situation that you wish us in now.

R. Improvident savage! You don't see that after having annihilated our hunting by inundating us with game, he would annihilate our gardening by inundating us with vegetables. F. But this would only last till we were in a situation to give him something else ; that is to say, until wo found something else which we could produce with economy of labour for ourselves.

R. Something else ! something else ! You always come back to that. You are at sea, my good friend Friday ; thero is nothing practical in your views.

The debate was prolonged, and, as often happens, each remained wedded to his own opinion. But Robinson possessing a great ascendency over Friday, his opinion prevailed, and when the foreigner arrived to demand a reply, Robinson said to him ' Stranger, in order to induce us to accept your proposal, we must be assured of two things

The first is, that your island is no better stocked with game than ours, for we want to fight only with equal weapons.

The second is, that you will lose by the bargain. For, as in every exchange there is necessarily a gaining and a losing party, we should be dupes if you were not the loser. What have you got to say ? '

'Nothing,' replied the foreigner, and bursting out laughing he regained his canoe."

We do not, of course, expect to convert our Tariff Reform readers by Bastiat's fable. It is too late for that. We do, however, want them to realise what our case is, and we cannot put it better than above. Also, converted or not converted, they cannot fail to be amused by the whimsical humour of Bastiat's style. No doubt it loses something in translation, but even translated it is full of spirit and " go." Bastiat's works, whether he is attacking Protection or Socialism, are full of fables, and we hope from time to time, if this experiment is favourably received by our readers, to transfer some of these pregnant stories to our pages.