To encourage agriculture by the aid of protective duties is vicious policy; for agriculture can be encouraged only by promoting manufacturing industry; and the exclusion of raw materials and agricultural products from abroad, has no other result than to impede the rise of national manufactures.
The economical education of a country of inferior intelligence and culture, or one thinly populated, relatively to the extent and the fertility of its territory, is effected most certainly by free trade, with more advanced, richer, and more industrious nations. Every commercial restriction in such a country aiming at the increase of manufactures, is premature, and will prove detrimental, not only to civilization in general, but the progress of the nation in particular. If its intellectual, political, and economical education, under the operation of free trade, has advanced so far, that the importation of foreign manufactures, and the want of markets for its own products has become an obstacle to its ulterior development, then only can protective measures be justified.
A nation without extensive territory and of otherwise limited resources, which does not control the mouths of its rivers, or which has not suitable boundaries, cannot resort to the protective system, or at least cannot employ it with full success. It must be first enlarged by way of conquest or negotiation.
Manufacturing industry is concerned with so many branches of science and art, it implies so much experience, practice, and adaptation, that the industrial training and education of a country can proceed but slowly. All excessive or premature protection is expiated by a diminution of national prosperity.
No commercial policy is more dangerous and reprehensible than a sudden resort to absolute prohibition of foreign products. It may, however, be justified, when a country, separated from others by a long war, finds itself almost in a compulsory state of prohibitions in regard to foreign products, and under the absolute necessity of offering a high premium to the industry which will enable it to supply its own wants.
The return from such a condition must be by gradual transition from the prohibitive to the protective system, and should be effected by means of duties fixed by anticipation, and decreasing gradually. On the other
hand, a nation which is to pass from free trade to the protective system should commence with low duties to be afterwards raised by degrees according to a suitable scale.
Duties thus fixed by anticipation must he strictly maintained by the government; it must be careful not to diminish them before the appointed time, and equally careful to raise them if they should prove insufficient.
Duties upon imports so high as absolutely to exclude foreign competition are prejudicial to the country which adopts them; for they suppress all rivalry between domestic and foreign manufacturers, and encourage indolence among the former.
When, under the rule of suitable and progressive duties, the manufactures of a country do not thrive, it is an evidence that the country does not yet possess the conditions requisite to a manufacturing people. Duties designed to favor an industry should never be put so low as to endanger the existence of the latter from foreign competition. It should be a rule to preserve what exists—to protect national industry in its trunk and in its roots.
Foreign competition should not have more than its share in the annual increase of consumption. Duties should be raised when foreign commodities supply the greatest part or the whole of the increased annual consumption.
A country like England, which is far in advance of all its competitors, cannot better maintain and extend its manufacturing and commercial industry than by a trade as free as possible from all restraints. For such a country, the cosmopolitan and the national principle are one and the same thing.
This explains the favor with which the most enlightened economists of England regard free trade, and the reluctance of the wise and prudent of other countries to adopt this principle in the actual state of the world.
A quarter of a century since, the prohibitive and protective system of England operated to her detriment and to the advantage of her rivals.