" RECIPROCITY " AND FREE-TRADE.*
MR. A. J. WissoN's volume on _Reciprocity, Bimetallism, and Land Tenure-Reform may be regarded as a convenient work of reference, in which to look for an exposition and refutation of the erroneous economic beliefs which became current during the recent commercial depression. The remedies proposed for the unsatisfactory condition of trade that was lately so conspicuous were two. One, " Reciprocity," was an old friend with a new face ; the other, "Bimetallism," was a novelty, at least to the general public, but had long been the dream of a particular school of currency theorists. Mr. Wilson's examination of the doctrine, that it is sound policy to endeavour to force the nations of the world to abandon their protective tariffs by a little counter-pro- tection, forms the first half of his work. Almost the whole of the contents of the volume had already appeared in Macmillan's Magazine at different periods during 1879, and much of it was written before the time when the revival of commercial and in- dustrial activity in America had begun to make itself felt here. Mr. Wilson speaks with considerable scorn of the " ardent, wordy Free-traders" who declare that, "in theory, you know, Free-trade is an excellent thing ; but in these days the world must content itself with something less perfect, but more prac- ticable and handy." The fact that views of this kind were actually held is not so surprising as Mr. Wilson thinks it is. There can be no question that the great mass of the people of England do not understand Free-trade. They were induced to adopt it " through their stomachs," and not through any intel- lectual process whatever, and a very slight taste of commercial depression was quite enough to set people talking about " one- sided Free-trade," and the folly of allowing England to be made a receptacle for the cheap exports of foreign nations. This phenomenon is not even a novelty, though, owing to the un- usual length of the late trade depression, it obtained more notice than on previous occasions. Any one who remembers the winter of 1869-70 will call to mind the complaints that were then made about foreign competition, and the agitation against " Free-trade without reciprocity " which was set on foot by the carpenters, who were at that time rather closely pressed by the importation of window-frames from Sweden, ready-made.
Mr. Wilson quotes from the letter sent by Mr. Maclver, M.P., to the Times, in November, 1878, which certainly is a miracle of obtuseness. Mr. Wilson's remarks on the proposal to make "our foreign friends" understand "the disadvantages under which a British retaliatory tariff would place them," are happy enough. "Here," he says, "you have the whole secret. Reci- procity means retaliation. We are to preach Free-trade, as the followers of Mahommed preached Islamism, by a little forcible persuasion. If nations became converts to a new creed by the power of the sword, why not to a new political idea by the might of retaliation P" But even Mr. Wilson seems to us to grant far too much importance to the "divergence between the values of our import and export trades " than it at all deserves. A permanent excess of imports is the normal condition of our trade, in consequence of the vast sum of British and Irish money invested abroad. This Mr. Wilson, of course, admits. He, unlike so many writers, is in no degree under the domina- tion of that venerable superstition, the " balance of trade " theory, which alleges that, somehow or other, it ought to be possible to obtain an equation involving exports and imports in the case of each particular nation.
Although, however, ho remarks, in reply to those who are terror-struck at the excess of imports, that " the country is in no great danger of continuing long to buy what it cannot pay for," be appears to think that it is possible for "the nation" to go on buying, for a time at any rate, what it cannot pay for. The power of words is certainly enormous. We do not suppose that Mr. Wilson is much blinded by the convenient
• Reeprneity, It;motollhon, and bad-Tenure Reform. By Alexander J. Wilson. London Macmillan and Co. 1880.
phraseology which enables us to say that " the United King- dom has imported so much, and exported so much," but we
see every day that persons less familiar with economics than he is are blinded by it. Were this not so, there would be no pos- sibility of the existence of a belief that a nation can import more than it can pay for, except indirectly by borrowing the money to do it, as has been done by Peru, Turkey, and some other nations. Importers are individual members of a nation,. who must pay for what they buy of the foreigner, or be bank- rupt. If " the nation," i.e., the nation in its capacity of con- sumer, cannot afford to buy the goods imported, the importer may be trusted to contract his operations. The answer some- times made to this is, " Oh, yes ; the foreigner gets paid, of course, but of late he has been paid in securities ; we have been exporting our capital to buy wheat and other articles of food." Even if this statement were proved to be true, which it is not, and cannot be, there would be nothing very formidable in the fact alleged.
Mr. Wilson has no difficulty in showing that reciprocity could not help us, by pointing to the condition of the Protectionist nations around us, which was fully as bad, if not worse than our own. But he also shows that even if any good could be got out of tariff reform in the reciprocity sense, we are not in a position to adopt it, except in the case of articles of food, and no one except Lord Bateman and Mr. Maclver seriously pro- poses to tax these. With Mr. Wilson's remarks on the sugar- bounties question we do not agree, that question standing, as. we hold, on an entirely different footing from reciprocity. But we fully concur with him in his conclusion that " Reciprocity means tariff wars, and nothing else; whereas if we stick to our Free-trade, and allow other nations to taste the bitter- ness of their folly to the full, as France and the United States are now doing, and as Germany means to do, we shall triumph in the end."
We are not likely to hear much more of bimetallism for the present, especially if Germany, France, and the United States unite to "uphold silver." The remedy it offers is not one that the general public will comprehend. The arguments both for and against it are too abstruse to take any hold on any but persons who have some sort of acquaintance with economics.. Mr. Wilson's discussion of the " Gospel of Bimetallism " is sound and instructive. Not even his incisive criticisms of this. "quack specific" could, however, be half as effective on any reasonable person as the study of bimetallistic literature. lf any one ignorant of the nature of the question is under the im- pression that there may be " something in it," we recommend him a course of M. Cernuschi, which will probably make him resolve to avoid the whole subject for the rest of his life.
The concluding portion of Mr. Wilson's work deals with the. "Land Question." Mr. Wilson is an ardent reformer, and his zeal is even extreme. We agree with much that he urges against the present system, though we think he is guilty of exaggera- tion in attributing to the Land-laws the whole blame of the sad condition of the lower classes in England.
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